Successful year by Waitaki

Press, 11 December 1981, Page 8

Successful year by Waitaki

Waitaki N.Z. Refrigerating, Ltd, had a successful year — earning a “bottom-line” profit 21.6 per cent higher, at $18.9M, in the year ended October 1, the chairman (Mr E. J. Neilson) announced yesterday. However, the results were quite different from last year in that trading profit (excluding extraordinary items and the share of associated companies) actually rose 45.1 per cent to $18.7M, he said.

“This improvement was almost entirely because of the exceptional killing season, which saw the group process a record . tally of 9,709,578 lambs and sheep,” Mr Neilson said.

“This showed conclusively the benefits of high productivity and an excellent year in labour relations. Not only had the group managed to earn good profit from this high kill for its shareholders, but employees also benefited from the extended season.

The share of income of associated companies had fallen quite sharply from $1,248,668 last year to $97,366 this year. The main contributing factor was the loss incurred by F. J. Walker, Ltd, of Australia, which, in common with other companies in the meat trade in Australia, had suffered the effects of droughts, high cattle prices, reduced availability of livestock, industrial disputes, and lower realisations overseas for its products.

“Towers International, Ltd, and its U.K. subsidiary, Towers and Company, Ltd, had an excellent year which had helped to offset the effects of the loss in F. J. .Walker, Ltd. “The share of income of associated companies also includes, for the first time, the contribution from the group’s newly-acquired 21 per cent shareholding in the various companies comprising the Independent Casing Companies group .operating in New Zealand, Australia, America, Canada, and Germany.” Extraordinary items total $116,300 compared with

$1,419,385 the previous year which then resulted mainly from the sale of shares in NCF Kaiapoi,. Ltd. Tax amounts to SB.BM (last year $4.7M) and depreciation provided for the group to $7.7M (last year $6.7M).

The directors recommend a- final distribution of 12c a share which, together with the interim distribution of 9c, will make a total of 21c for the year. The final distribution of 12c will comprise 10c from share premium reserve, and 2c from revenue. This will give a tax-free distribution to most shareholders for the full year of 19c, with 2c taxable. Last year’s distribution was 18c of which 12c was tax-free to most shareholders.

The group had shown that it had maximised the benefits of the exceptional killing season during last year, Mr Neilson said. The operating results of the Town House group and of Tekau Knitwear, Ltd, are still de-, pressed because of the internal economic downturn. Maritime Carriers New Zealand Ltd had performed well. Most of theother diversified activities had also made good profit contributions. Trading in the group’s products last year had been very patchy because of the volatility in prices overseas, particularly in the United Kingdom for frozen lamb. This had caused the company, together with its other partners in Towers International to buy in New Zealand lamb op the U.K. market for some 6 weeks in the middle of the year, and this had a dramatic effect in improving U.K. price levels. The company is currently unable to pay the minimum price set by the N.Z. Meat Producers’ Board for mutton and all mutton would be acquired by the Board.

Returns from the company’s Nominated Pool scheme for lambs had been good so far, in which the sale of large quantities of lamb for the Iranian market had been a significant factor. The company has felt some concern over the delay in re-

ceipt of payments from Iran; This was now being rectified slowly by- the Iranian authorities, and some payments which were overdue have been received.

The current year, nowever, would prove to be of a different pattern. Mr Neilson stated that it was anticipated that the total livestock offered for the export kill would be down at least 5 to 6 per cent on the previous year, arid price levels overseas are not adequate.

The chairman concluded by stating that the,directors could foresee for the current year a number of factors which were not as favourable as last year, such as a reduction in the kill, and the continuing low prices overseas — particularly for beef in North America. Excess killing capacity in the North Island would make livestock procurement there much more difficult and competition would be very severe.

Notwithstanding these factors, the directors are optimistic for the current financial year, as the group’s over-all resilience would doubtlessly demonstrate itself again.