Slow start for J. Rattray

Press, 2 December 1981, Page 28

Slow start for J. Rattray

The present financial year had begun “rather" slowly for J. Rattray and Son. Ltd. the Christchurch-based grocery wholesaler, said the chairman. Mr A. W. Barnett, in the annual report. This was apart from the trading of Fairburn Wright, Ltd, particularly the housewares division. “However, with the moves already taken and those about to come to fruition in respect of the grocery activities. and the continuing good progress of Fairburn Wright, a satisfactory result for the year to August 31 is expected," he said. External sales of the grocery activities through the eight branches in the South Island reached $87.7 million in the 13-month period. The increase was not as good as in previous years because of the rather limited prospects for growth and the more vigorous competition encountered in most locations. Fairburn Wright. the major subsidiary, traded well and sale increased more than 30 per cent on an annual basis to $18.4M, and the pre-tax profit of $461,000 representing more than 18 per cent of the total group pre-tax profit for the period. Mr Barnett said. The effect of inflation on costs and stocks for a com-

pany like J. Rattray, which was involved in distribution, could be detrimental, especially if taxation was not adjusted to all for that part of profits which were profit in name only and represented only inflationary price changes. The Nelson grocery and variety business of Burns, Philp ' and Co.. Ltd. which was bought last September, had traded up to budget, and further growth was expected. Three Dunedin supermarkets were purchased after the September 30 balance date, and Hume D. Christie and Son. Ltd. wholesalers and importers, was also acquired.

Since balance date, the company's main warehouse and office building in Christchurch had been sold on a lease-back basis for a sum approaching SIM. “Resulting from this will be a realised capital gain which will be included in next year's accounts and available for distribution as tax-free dividends. “In addition to this sale, further property sales are being negotiated so that funds can be better employed in other parts of the group's activities. Mr Barnett said.

J. Rattray earned a total group net profit of $1,356,510 in the 13 months to August 31. compared with $1,443,149

in the 12 months to July 31 in the previous period. Included were extraordinary losses of $120,878 from the sale of properties and goodwill written off, compared with a profit of $268,706 in the previous year.

The group net trading profit was $1,477,388. and on an annual basis this was an increase of 16.1 per cent.

The final result was after providing $170,201 more for tax at $1,035,443, and $51,487 more for depreciation at $347,882.

Group sales were $112.2 million, an increase on an annual basis of 16.9 per cent.

A recommended final dividend of 9c a, share (4c taxfree) increases the annual rate from 15c to 17c a share (17 per cent) on capital increased by the one-for-six bonus issue last year. The dividend requirement is $398,954. and it is covered 3.1 times by the profit after allowing for the preference dividends. Shareholders' funds improved $1,004,448 to $10,498,538. including ordinary capital up $329,816 to $1,965,304 after the bonus issue and staff share issue.

Working capital rose $886,333 to $7,615,989, and the current ratio was steady at 1.5 to one.