Chenery looks to longer term

Press, 6 August 1981, Page 18

Chenery looks to longer term

PA Auckland The directors of the Auck-land-based plumbing contractor and manufacturer, Chenery Holdings, Ltd, are not enthusiastic about the short-term outlook for contracting, but consider the long-term prospects for the company - manufacturing operations to be excellent.

Writing in the 25th annual report of the company, the chairman (Mr H. S. Rose) says that the energy projects planned for the 1980 s should yield a number, of opportunities for the subsidiaries involved in contracting. Mr Rose says it is expected that the expansion of the group manufacturing companies will continue, although at a

the group to cover costs and retain staff. Retentions held against the group under the provisions of the Wage Protection and Contractors’ Licensing Act increased from $676,000 to $691,000 at March 31. Mr Rose says there is a growing demand for legislative change towards the Act throughout the country.

Mr Rose reports that each manufacturing company traded profitably, with the most significant progress being made in Ideal Tube Industries, Ltd, where a further substantial increase in export and local sales was achieved.

During the year Broadway Sheetmetals, Ltd, became a fully-owned subsidiary when

slower rate in the short term.

As reported, group taxpaid profit for the March 31 year was 70.1 per cent higher at a record $813,546. Turnover was 21.9 per cent higher at $11,798,000, of which $1,646,000 was export sales which were 81.4 per cent higher than a year earlier.

Reviewing the operations of the contracting and maintenance sector of the group, Mr Rose says that although each subsidiary in this area operated profitably no real growth was experienced.

As a result of an unsatisfactory forward workload and keener competition for a lower level of construction activity, tendering margins were trimmed. This enabled

the outstanding 40 per cent of the capital was purchased.

The sum of $295,000 was spent during the year on the acquisition of fixed assets. A substantial portion of this was applied to manufacturing plant. The Development Finance Corporation assisted in the financing of this expenditure.

During the year debentures totalling $218,000 were repaid on maturity and a further $200,000 debenture placement was made with an institution.

As reported, the company plans a one-for-five cash issue at a premium of 150 c. Mr Rose says this is being done to maintain an acceptable capital gearing. Details

of the Issue will be sent to shareholders on August 14.

Shareholders’ funds increased during the year from $3,218,000 to $3,796,000, the increase was almost entirely because of internal growth. This represents a gearing ratio Of 43.6 per cent to total assets, marginally ahead of a year earlier. The asset backing a share at balance date was 3®Bc compared with 261 c a year earlier. Current assets were $5,988,971 compared with ’54,877,028, and current liabilities were $3,596,237 compared with $3,127,478. Theaturrent ratio was 1.7:1 compared with 1.6:1. The earifing rate on shareholders’ funds was 21.4 pei; cent (14.9 per >cent) and that on total funds was 9.3 per cent compared with 6.4 per cent