UDC sees challenge
PA Wellington The chairman of UDC Group Holdings. Ltd, (Mr D. Nicholson) views trading conditions this year as challenging. but says that the company is confident of continued growth. “Large sums of money would be needed to finance expansion in the economy as the Government’s major capital projects come on stream,” Mr Nicholson says in the company’s annual report. “UDC — an ANZ Banking Group subsidiary — has the expertise to assist with New Zealand's economic development." Any major reduction in UDC's present level of lending could have severe effects
on the plant replacement policy of businesses. Much of the group's lending is to organisations undertaking projects that are in the national interest. In the past 18 months essential plant and equipment required for development projects and export manufacturing have increased in price to such an extent that clients are forced to borrow significantly larger amounts to replace old plant or purchase new equipment. An analysis of finance house new lending shows a sector-by-sector break-down. Lending to heavy construction and engineering is about stable at 15.5 per cent, with farming and fishing up
slightly to 14 per cent, manufacturing down to 16.7 per cent, transport and storage down to 14.2 per cent and service industries up to 17.5 per cent. The company’s Hong Kong subsidiary, Mercantile Securities (Hong Kong), Ltd, increased profit by only seven per cent during the year. Its lending portfolio was restricted by high borrowing rates, and uncertainty in the Euro-currency prospective medium-term borrowers from considering offshore finance, Mr Nicholson said.
As previously reported the company’s net trading profit was $4,406,000. giving a 19.6 per cent return on average shareholders’ funds (16.5).
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Press, 13 February 1982, Page 19
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276UDC sees challenge Press, 13 February 1982, Page 19
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