Progressive plans 1:5 bonus

Press, 21 May 1982, Page 16

Progressive plans 1:5 bonus

Progressive Enterprise, Ltd. Auckland-based supermarket operator proposes a 1:5 bonus issue after a 17.6 per cent increase in net profit to a record $4.1 million in the year ended March 28. The result, which is on an equity-accounting basis and unaudited, was after providing $400,000 more for tax at $3.4 million, the directors say.

Earnings ratios for the financial year were 15.6 per cent (16.7 per cent) on average shareholders funds; 51.1 per cent (52.8 per cent) on fully-paid ordinary capital of $7,902,721 ($6,488,383) which is equivalent to 38.9 per cent (40.2 per cent) on capital as it would have been if the specified preference shares had been converted at the end of the financial year; 8.2 per cent (8.7 per cent) on average total funds employed. Shareholders funds in-

creased during the year by $3.46 million to $28.07 million ($24.61 million). Cash flow remains strong at 12.4 per cent (13 per cent) of average funds employed. Heavy costs involved in the introduction of a completely new merchandising programme and the opening of the first Food Town supermarket outside Auckland, in Hamilton were reflected in the first half after tax earnings showing an increase of only 3.2 per cent on a sales increase of 28.8 per cent. Second half results reflect the success of the Food Town plus merchandising philosophy. and also include the opening in November of another high volume Food Town outlet at Meadowbank. Sales increased 46.3 per cent, and after-tax earnings were 26.6 per cent ahead of the same period last year. Georgie Pie incurred a loss for the year of $130,000 compared with a loss of

$173,000 last year calculated on the same basis. A positive cash flow was recorded for the year. The directors propose to recommend at the annual general meeting to be held on Tuesday July 27, 1982 that shareholders " approve a bonus issue of one fully-paid ordinary share for every five fully-paid ordinary shares, from capital reserves and free of New Zealand income tax to the shareholders and to the company. The directors will also recommend a final ordinary dividend of 3.25 c a share (6.5 per cent) on ordinary capital increased by the above bonus issue. This dividend, which totals $616,412, will be paid on August 13, 80 per cent from the investment realisation reserve which under the existing tax law is believed to be tax-free, and 20 ■ per cent from share premium reserve, non-taxable in the hands of shareholders.