TNL looks beyond N.Z.

Press, 31 October 1981, Page 19

TNL looks beyond N.Z.

The receipts from the offshore activities of TNL Group, Ltd. the diversified Nelson-based company, were likely to increase significantly in the new financial year, said the managing director, Mr Garth Butler, in the annual report.

The receipts exceeded $25 million in the year to June 30, an increase of 57 per cent on the previous year, and they were growing at an impressive rate.

Mr Butler said the policy of the directors was to try for the best return on shareholders’ funds ’ and to pay increased dividends, tax-free when possible. To achieve this, TNL intended to expand its interests in the tourist industry, increase services within the road passenger and parcel transport industry, and increase the market share of freighting and forwarding activities.

Further points were to make mineral exploration and development more profitable, rapidly expand

the export of agricultural, horticultural, and marine foodstuffs, and to increase the investment in the exportoriented forest industry. “The future prospects of the group appear to ne most promising and are soundly based on presently known and indicative information,” he said.

Although the devaluation of the New Zealand dollar assisted the sale of TNL’s exports, this was largely offset by the high internal inflation rate arid the increased cost of imported trucks, coaches, parts, and componentry. An important factor in the continued growth of new markets was Government assistance in the form of incentives. The TNL companies had used these incentives to advantage and would continue to do so, he said.

“We are aware that there is criticism by some nonrecipients, but it should be understood that a company such as ours would be .unable to commit the present effort

into developing new markets without assistance.” Mr Butler commended the present Government’s export policy, and said tnat substantially increased sales of agricultural and horticultural products, and tourists inbound, would result from continuing the incentives. TNL had budgeted to further improve the return on average shareholders’ funds this financial year.

“Provided there was no marked deterioration in trading, we believe that a significantly improved rate of return is sustainable into the future,” he said.

As reported, the total group net equity-rose 40.8 per cent to a record $5,710,000 in the year to June 30, on sales 22.7 per cent higher at $72,862,000. Equity profits fell 6 per cent to $469,000, and extraordinary profits (after tax) totalled $1,090,000 ($954,000 previously). The profit was after providing $1,270,000 more for tax at $4,666,000, and $387,000

more for depreciation at $2,536,000. A recommended final taxfree dividend of 6.5 c a share increases the annual rate from 9c to 10c a share (20 per cent). The dividend requirement is $2,339,000, and is covered 2.3 times after allowing for the preference dividends.

Total shareholders’ funds rose $3,723,000 to $34,465,000, including ordinary capital up $147,000 to $11.7M because of staff share issues. The earning rate on average shareholders’ funds improved from 13.1 per cent to 17.2 per cent.

Working capital moved from a deficit of $191,000 to a surplus of $1,353,000. The current ratio reflected this move, rising from 0.9 to 1.1 to one.