AHI expects solid improvement

Press, 4 August 1981, Page 20

AHI expects solid improvement

PA Auckland Results for the June quarter of the present Alex Harvey Industries, Ltd, year are significantly ahead of the corresponding period of last year, the chairman (Mr H. N. Avery) told the annual meeting. Good forward projections, together with gains expected from recently acquired new ventures indicate that the company should show improved results this year, he said. It was not easy to assess the future but the forward order position both locally and overseas gave ground for optimism. It was anticipated that subsequent quarters would also be better than last year, and the directors are expecting a much more satisfactory result for the full year. Mr Avery said the building industry still caused problems but the company looked forward to some improvement. As the largest supplier of packaging and building products in New Zealand, the company was concerned that in the last year volume in real terms had fallen 7 or 8 per cent. That was probably the greatest fall to occur in the last 30 or 40 years.

The drop in housing starts, to 14,000 a year, looked worse, he said, when it was realised that there was a 1 per cent growth in family formation. The minimum number of houses and flats that should be under con

struction was closer to 20,000, he said.

Until the supply position improved the continual rise in the price of existing houses could not be helped. Mr Avery said he was disappointed that some sections of the community appeared to be adopting the view that inflation was just something for the times and we were going to have to live with it. Inflation was running at slightly more than 15 per cent, he said, largely fuelled by very high wage and salary levels. These over the last 12 months had increased over all at a level of 20 per cent.

This unreasonably high level of wage and salary increases was creating major difficulties for companies to invest in new productive assets which increase growth and employment.

Interest rates, too, were extremely high, and were now running at a level in excess of the rate at which companies could earn on assets.

Inflation was still the prime worry, he said, which needed continual and positive attention.

The question of closer economic ties with Australia was a serious matter, he said, on which he hoped the Government would make haste slowly and heed the advice of the industrial sector

New Zealand industries were efficient for the scale of volume they enjoyed, he said, and it would be foolish to expect them to trade without some protection against Australia any more than Australia could be expected to compete with Japan or America on equal terms.

It would seem unwise, he said, to sacrifice New Zealand industry when the capital had been put in place and the enterprise was operating efficiently. Similarly, why should a widespread increase in imports be permitted at a time when the market was already depressed and the balance of payments position was critical.

Mr Avery told the meeting that the interim dividend normally paid in November would be paid at the end of January. It had been the practice to pay dividends in July and November, he said, which meant shareholders received the interim four months after the final of the previous year and then waited eight months for the next distribution.

The meeting approved the payment of a final dividend of 10c a share (10 per cent) making a total of 18c for the year. The distribution, from tax-paid profits, required $7,327,890.

The meeting also reelected, in one move, seven directors w'ho had retired either in rotation or in accordance with the articles