Fletcher Challenge starts well

Press, 12 November 1981, Page 21

Fletcher Challenge starts well

PA Wellington Fletcher Challenge, Ltd, is expecting the current year’s profit to be substantially ahead of the annualised $80.7 million profit in the June 30 year. The chairman (Mr R. R. Trotter) told shareholders at the first annual meeting of the new giant at the overseas passenger terminal this morning that the current year had started well and “for the first three months sales and earnings are ahead of plan and ahead of last year in almost all of our business areas." He allayed fears about the possibility of a cash issue rumoured for some time and about the forestry incentives getting the chop. “For current operations we have a sound base of shareholders’ equity and our plans for the current financial year do not involve any action that would require an issue of equity capital.

“The relative deterioration in our share price during recent months has, we believe in large part been because of concern that there may be discriminatory removal of export incentives from some forestry companies. “From discussions with the Government we are assured that any changes would be evenly applied and public announcements have quite clearly reaffirmed that export incentives are to be continued until 1985. And that if any changes are made, some satisfactory alternative would be provided,” Mr Trotter said. “I am quite confident we will not be adversely affected in relation to any other exporter,” he said. He said the directors were proud of the export performance of the company. Last year’s exports totalled $3OO million for the group. Within three weeks the

company intends to file a prospectus for a major issue of secured debenture stock under the new trust deed previously mentioned. The main reasons why the current year was going well were the increase in building demand, kraft pulp and newsprint prices being higher than planned (resulting in earnings being above budget) and confidence in the rural sector, and the performance of the finance and computer sector was well ahead of last year. Fletcher Challenge was having discussions with several major interested aluminium producers on the smeker. But it would be the middle of 1982 at least, before any decision, could be taken. “Although it is early in the year to make predictions, we do expect our full year’s result in 1982 to be substantially above the annualised result this year of $80.7 million,” said’Mr Trotter.