Ravensdown profit rises to $4.6M

Press, 28 October 1981, Page 28

Ravensdown profit rises to $4.6M

The net group profit of Ravensdown, Supply Cooperative, Ltd, and its subsidiary, Ravensdown Fertiliser Co-operative, Ltd, ■ increased by $1,233,980 to $4,635,695 in the year to the end of May. This result was achieved after transferring $915,800 to a reserve for development expenditure but including non-recurring income of $393,170. After deducting the proportion of the profit attributable to a minority interest in the subsidiary company, a balance of $2,892,741 was available. A rebate of $2.75 per tonne being paid to shareholders on fertiliser purchased during the year amounts to $1,153,134 leaving a balance of $1,739,607, which is carried forward in retained earnings. Sales for the period amounted to 499,071 tonnes and turnover was $53,462,770 up from $44,025,099 in the previous year. The chairman, Mr P. H. Elworthy, said in his review of the year that in a period in which tonnage sold was down by 17 per cent on the previous year, it was pleasing to report a satisfactory profit. The trading surplus for the year before taxation had increased by $337,696 and there was further nonrecurring income of $393,170. This had been achieved through increased management efficiency, which had helped to offset the devastating effect of a high inflation rate and the depreciating New Zealand currency. The company had to ensure that it had the capacity to hold stocks at prices undreamed of only a short time

ago, and it was for this reason ana Because ot otner inflation-caused problems which the company faced that the directors had elected to maintain a satisfactory level of profitability and decided against taking the course of lowering the price of superphosphate marginally and declaring reduced profits. The company, however, wished to warn shareholders that the dramatic effect of increased efficiency .on profits, which had been seen over the past two years and a half, could not be sustained as the margin closed. Future profitability would depend substantially upon throughput and the directors recognised that increased use of fertiliser at current prices would only be sustained by a particularly buoyant agricultural economy. Mr Elworthy recalled that since the company was formed a tax-free dividend of 10c per share had been paid and consecutive rebates of $1.35, $2.10 and $2.75 this year.

The continued strengthening of the company’s position was emphasised in the consolidated balance sheet, he said. In addition to the paid up capital of $4,509,293 in the two and a half years the company had been trading reserves of $7,208,890 had been accumulated. Already $700,000 had been repaid to the Meat Board and it was intended a further payment of $300,000 would be made this year, although principal repayments were not due to start until September next year. In addition $1.13M had been accumulated which was held on short term' deposit. Referring to the decline in fertiliser sales, Mr Elworthy said that the cost of super-

phosphate had depressed the demand for fertiliser and the. further massive increase in the price effective from July 17 had worsened the problem. A continuing fall was expected in the demand for fertiliser and the extent of the decline would depend on farmers’ confidence in the Government to hold inflation and, in the meantime, the supplementary minimum price levels.