Healing interim ‘satisfactory’

Press, 25 November 1981, Page 27

Healing interim ‘satisfactory’

The interim result of Healing Industries. Ltd, the diversified Auckland bicycle manufacturer, must be considered satisfactory when compounded against the corresponding results for the same periods since 1977, said the chairman, Mr H. A. Christensen, in a half-yearly report to shareholders. The unaudited group net profit fell 12.4 per cent to $1,155,572 in the six months to September 30, compared with the same period last year. Based on the compounded rate of growth since 1977. it amounted to an increase of 48 per cent a year, he said. The 1979 ($1,047,000) and the 1980 ($1,319,000) results must be considered as exceptional. because Healing took full advantage of the bicycle boom and maximised the return to shareholders. The profit in line with budget, and indications were that this should be main-

‘tained to the end of the financial year," Mr Christensen said. The high amount of stock held at March 31 was being reduced as planned to a level equal to the activity of the group. This reduction in stock had strengthened the ratio of shareholders' funds to total assets from 45.1 per cent at March 31 to 51.6 per cent at September 30. Paint sales continued to show steady growth for the first six months trading, compared with the previous year. Healing had reinforced its leadership in the marine paint industry by releasing a new range of marine paint finishes, marketed in conjunction with the most comprehensive boat-owners manual produced in the world, he said. In addition, Healing sponsored the New Zealand Admirals Cup team competing in Cowes, United Kingdom in August. The team finished fifth in the world with Swuzzlebubble, sailed by Mr I. Gibbs, winning the event on individual boat performance. Epiglass paints were chosen by both the New Zealand and Australian cup teams. Efforts were being made to developing new bicycle markets overseas for the company’s products, an example being a large shipment of cycles to the Pacific, Mr Christensen said. The continuing fall in the New Zealand dollar, in relation to other currencies, was enabling Healing to be competitive in the United Kingdom and Europe. Export incentives assisted in cutting company tax, which reduced to 35 per cent of the pre-tax earnings, com-

pared to 39 per cent for six months of the previous year. The New Zealand cycle market peaked in the 1979-80 year, and began to soften late in the 1980 year. The 1979-80 years must be considered to be exceptional, with additional sales ■ being created because of the energy crisis, he said. “We believe that the market has returned, (with sales) increases from October becoming apparent.” Healing was working hard to maximise its share of the market with sophisticated marketing, better presentation, and promotion of new models. “We have recently negotiated an agreement to produce and market the world famous ‘Red Line’ brand of BMX cycles, which will include exporting frames to Australia,’’ he said. Avery Wood Holdings, Ltd, contribution was at budget. The Michelin range of tyres of AOF tyres were renowned throughout the world for quality and price performance, with New Zealand being no exception. The Michelin range of tyres imported into New Zealand were complementary to the range of tyres manufactured in New Zealand. The sales of electroplating and other metal finishing products were up to budget and ahead of last year. The Auckland-based grit-blasting and painting activity continued to run profitably, but because of the low activity in engineering works, particularly in the South Island, Healing sold its Dunedin and Christchurch units. The pre-tax net profit fell 18.4 per cent to $1,778,023, and the tax provision declined $196,177 to $662,451. No sales figures were disclosed. The directors have increased the interim dividend from 4.75 c a share to 5.25 c a share (10.5 per cent) payable on February 16, ex dividend on January 29. 1981.