Suckling uncertain

Press, 3 June 1981, Page 25

Suckling uncertain

The outlook for future trading is riot clear, according to the chairman of Suckling Industries, Ltd (Mr W. A. Hadlee) in the annual report to shareholders. Election years traditionally- resulted in a market increase. At the time of writing the report, the footwear industry was awaiting the release of the study undertaken by the Government. “This report was originally due last June, and the delay is not helping the present air of uncertainty.” he said. Suckling had taken steps to offset the effects of inflation on costs and were concentrating on the styling and design of its wide range of footwear to obtain a larger share of the market. “Should we be able to achieve this objective, we should restore profitability to a more acceptable level; however the general increase in all living costs, which leaves less to spend on clothing and footwear, will continue to have a distinct bearing on sales,” Mr Hadlee said. The decline in customer demand, coupled with rising costs because of increased wage, material rates, and

finance charges, caused profitability to fall significantly in the March 19 year. All factories of the group were affected by the downturn and were forced to take stringent measures. The small unit at Timaru was closed, and resulting redundancy payments, together with similar payouts to redundant Christchurch staff, amounted to $60,000. Othei factories worked four or fou' and one-half day weeks, fovarying periods because o the lack of orders. In spite of the depressec state of the economy wag< rates continued to rise fastc than the level of inflation, i service allowances and in crements were taken int< account. The directors believed thathe high labour cost walimiting employment becaust in many cases consumer re sistance to higher prices was preventing the full recovery of wage increases, Mr Hadlee said. Concern was also expressed at rising interest rates. An effort to reduce group

stocks to improve liquidity was successful, but the total interest charge on borrowings still rose $68,172, or 39 per cent, compared with last vear. he said. As reported, the group net orofit fell 58.1 per cent to 5231.167. on sales revenue a narginal $64,193 lower at '12.1 million. The profit was after proiding $376,322 less for tax at 101.429, but $5383 more for lepreciation at §179,460. In iddition. there were redunlancy payments and a 23.5 ier cent increase in other ‘dministration and distribuion expenses. A recommended final dividend of 9c a share gives a steady annual rate of 16c a •hare (16 per cent), of which :3c a share is tax-free. The iividend requirement is ■1160.000 and it is covered 1.4 imes by the profit. Shareholders' funds rose $74,767 to $4,882,794, including steady ordinary capital of SIM. Working capital rose $212,195 to $3,565,962, and the current ratio improved from 2.3 to 2.8 to one.