Ballins profit $6,548,000

Press, 3 June 1982, Page 20

Ballins profit $6,548,000

The group tax-paid profit from trading of Ballins Industries. Ltd. including share profits of associate companies, rose 26.1 per cent to $3,942,000 in the year to March 31, the directors announced.

Non-trading profits (realised capital profits) were $2,606,000 compared with $406,000 last year. As a result “bottom-line” profit almost doubled — from $3.5M to $6.5M.

The provision for income tax was $998,000 higher at $2,560,000. Consolidated turnover for the year increased 16 per cent to $77,613,000, which includes turnover from acquisitions made during the year but excludes the turnover .from hotels and taverns since these were leased in May, 1981. . All trading divisions produced satisfactory profits, each performing well ahead of last year.

Acquisitions during the year are included to the extent of five months trading from Johnson’s Wholesale Wine and Spirit Company,' Ltd (previously 25 per cent owned) and four months trading from the eight outlets acquired from Dalgety New Zealand, Ltd. The group’s Liquorland chain of domestic wine and spirit outlets obtained an increase in , market share but at the expense of Trading profit from this division increased by 26 per cent. The arrangement made in May-, 1981, whereby Ballins’ hotels and taverns would be leased to Inns of Canterbury,

Ltd (50 per cent owned each by Ballins and Lion Breweries, Ltd) and managed by Lion has been very successful and reflects the specialist expertise Lion has at its disposal.

the soft drink and fruit juice sectors performed well and trading frdm the remaining “Chicken Spot" outlets shows an excellent return on funds invested.

As previously announced, the non-trading profits arise from the sale of shares in Lion Breweries, Ltd, Fletcher Humphreys and Company, Ltd, and Penfolds Wines, Ltd, and the disposal of assets within the company's hotels and taverns division to Inns of Canterbury, Ltd. Trading since balance date has continued at an acceptable level.

The acquisition. of the shareholding in J. Rattray and Son, Ltd, under the merger arrangements is now almost complete. Profit from J. Rattray and Son Ltd will be included in the current year’s profit as from April 5, when the offer to acquire the Rattray shareholding became unconditional. Unaudited tax paid trading ■profit of Rattrays for the six months ended February 28 was $896,900 29 per cent ahead of the six months ended January 31, 1981. From April the company exchanged its investment in Skychef International, Ltd, (Auckland airport food and liquor concession) for the total shareholding in Skychef Catering Services, Ltd, and Skychef Catering Services

(Wellington). Ltd. Both companies are engaged in industrial catering in Auckland and Wellington and a small Christchurch caterer, Manhire Caterers, has been acquired to provide a base in the Christchurch area. Since balance date satisfactory arrangements have been made for the sale of the company’s shareholding in McWilliam's Industries, Ltd. This sale will produce a realised capital profit of $2,083,000 and reflects a policy of planned redeployment of investments into assets which meet the company's return on investment criterion, and over which the company’s management has a direct influence. The directors are recommending a final dividend of 10 per cent (5c a share) including the shares issued on February 5 from the one-for-ten bonus issue. This dividend will not be liable for taxation in the hands of shareholders provided the taxation legislation with respect to such dividends remains unchanged. Ballins’ ordinary shares issued to the holders of shares in J. Rattray and son, Ltd, after the merger of the two companies do not rank for this dividend.

The total recommended dividend for’ the year is 18 per cent, all of . which is taxfree under existing legislation. This is equivalent to 19 per cent on the pre-bonus capital and compares with 16.5 per cent paid last year. Profit from trading covers the dividend on ordinary capital 2.5 times.