Waitaki faces harder year

Press, 15 February 1982, Page 22

Waitaki faces harder year

Waitaki N.Z. Refrigerating, Ltd. was facing conditions which ;were not as - favourable in the: short-term as those encountered last season, said the chairman, .Mr E. J. Neilson, in .the .annual report. ■/V.SThe company expected' ail lower over-ill kill, and export pricesto continue at a--low level, particularly on the North American market. “Some excess killirigcapacity in the North Island could produce fier.ce competition for stock arid make iprocurement. difficult,” he said. - “The.* company faces- the continual burden of increasing costs, particularly those ■related to imported items of-; plant and machinery.” < However, i the company.' possessed; the. expertise , and;’ experience necessary -;>td. meet these demands. The confidence in the future was , illustrated by the decision to-

■y- ouild a .new works, at Marl- ■■■ bproiigti,. to double " the throughput capacity, at . Wairoa. to expand the ser- . :jvices to farming iif, Otago. ,'*arid to increase the emphasis on overseas marketing, Mr Neilsori said. •• ,';X Although the cattle kilkfor’ the yearshowed an increase; 3 “it is. a matter -of some concern, that-the growth in beef numbers 'in the country is not being riiaintained, and killing facilities exceed supisply.” On trading activities, Mr Neilson said that the over-all results were not entirely sat- - isfactory; ■ but must be considered reasonable when cur- < rency .fluctuations again influenced the final-result. ..Although all? traditional lamb markets were serviced,. ;■£ considerable emphasis, was: i- placed bn expanding and? de- [ veloping new outlets. Marti keting and technical person"T nel concentrated on these -areas. ,? . . Waitaki had moved’away from the traditional/commodity trading aspect associated with the carcase trade, and 40 per cent of its lamb product was now prepared to the exact specifications from customers, Mr Neilson said. The Soviet Union was not in the market on a continual basis for mutton, and with only Japan taking regular shipments there was a large quantity of unsold mutton. This seriously affected trading for the year. “Current market prices are so depressed they do not meet the guaranteed minimum prices for the new season. Accordingly, we have passed ownership of the new season’s mutton to the New Zealand Meat Producers Board.” Waitaki was associated with the trials of a new

mechanical pelting machine in Nelson, and this machine, developed by the r industry, was seen as the forerunner of considerable technological change. .. 1 - “We consider, it absolutely critical to the future viability of our industry; that technological advances in processing are integrated into works operations without delay." The company '- was ” encouraged by' some in the trade union movement who saw the ■ need for such change, and the consequent economic disaster if it was resisted. Provided there was co-operation from the employees and trade union representatives. the company could adapt to these changes without staff losing their employment, Mr Neilson said. Construction had begun on the new- meat export slaughterhouse at Fifteen Valley, near Blenheim, which would allow withdrawal at the Picton works. Mutton and lamb slaughtering was expected to . begin at the start of the! 1983-84 killing season.

Capital expenditure for work during the year totalled $23.3 million, and work in progress totalled $6.3M. Tekau- Knitwear, Ltd. based in Ashburton, did not produce a profit during the year, and further rationalisation of its activities as planned, he said.

Maritime Carriers New Zealand, Ltd, were to start new services which would incur considerble costs in starting up and breaking into new territories. A new ship has been chartered, and the Dunedin returned to line.

F. J. Walker, Ltd. of Australia. incurred a sAustl.2M loss in the year to June 30. and it was expected that it would be difficult for this company to return to a profit in the present financial year.

However, the long-term confidence in this investment remained. The value of such a strategic holding was of importance to Waitaki, especially because of the depreciating New Zealand dollar. Mr Neilson said.

As reported, the group, net equity profit rose 21.i6 per cent to $18,873,076 in the year to October 31, including extraodinary profits of" $116,300 ($1,419,385 previously);', arid’ $97,366 ($1,248,668) from asso/ dated companies. " ' ' y

Total sales and investment income rose 52.3 per cent to $27.5M.

the profit was after providing $4,098,524 more for tax at $8,782,180, $1,094,194 more for depreciation ’’at $7,749,170, but $467,629 less for minority interests at $42,751.

A recommended final ordinary dividend of 12c a share increases the annual rate from 18c to 21c a share (21 per cent) of which 19c a share is tax free. The dividend requirement is $7,000,486, and it is covered 2.6 times by the profit after allowing for the preference dividend. Shareholders’ funds rose $16,533,170 to $129,428,364. including ordinary capital up $5,537,974 to $33.3M after the one-for-seven cash issue last February and staff spare issue.