Healing budgets to increase profits

Press, 15 July 1982, Page 20

Healing budgets to increase profits

■ Healing Industries. Ltd, was approaching the new financial' year with confidence, budgeting for realistic increases in both sales and profits, said the managing director (Mr T. C. Geldard) in the annual report. The company would be continuing to search for business that would complement the existing activities, and provide improved earnings for shareholders.

The acquisition of Industrial Chemicals (N.Z.), Ltd. after the March 31 balance date, provided further diversification for Healing, increased shareholders’ funds, and gave greater expansion opportunities from a wider base, he said.

"The management philosophy of Industrial Chemicals is not unlike that of Healing, with the company concentrating on high quality specialist products, and making and marketing them well, to maximise profits. "We believe that significant advantages will emerge from the cross-fertilisation of ideas, products, and markets because of the acquistion.” Because of the likely finalisation of closer economic relations (CER) with Australia in 1983, Healing regarded Consolidated Chemicals Pty, Ltd. its Sydneybased paint manufacturing and distributing company, to be of strategic importance, Mr Geldard said.

The Australian company was seen as a base for expanding the product range made in New Zealand, and to make for the Australian market those products that

could not be -economically transported across the Tasman.

“Healing is excited about the potential that exists in Australia, and the opportunities it provides for the group as a whole.". The demand for cycles was* , believed to have bottomed out, and the market was expected to remain steady, or increase slightly, after a serious decline in the last year. In March 31, 1981. the company had significant stocks of cycle components, and these had been reduced to match the activity of the cycle division at March 31, 1982, Mr Geldard said.

The group net profit rose 73.4 per cent to $3,070,000. However, last year $1,715,000 was written off in goodwill and the latest net trading profit ahead of this extraordinary item was down 11.9 per cent. The profit was after providing $ll,OOO more for depreciation at $427,000, but $665,000 less for tax at $1,721,000. A recommended final dividend of 7.75 c a share increases the annual rate from 11c to 13c a share (26 per cent). The dividend requirement is $1,018,000. and it is

covered 2.9 times by the final profit after allowing for preference dividends.

Shareholders’ funds rose $2,164,000 to $14,087,000, including ordinary capital up $653,000 to $3,916,000 after the one-for-five bonus issue in August. Working capital rose $1,467,000 to $9,976,000, and the current ratio improved from 1.7 to 2.3 to one. ,