‘Don’t sell’ warning from Chch Gas

Press, 21 July 1982, Page 23

‘Don’t sell’ warning from Chch Gas

After 116 years in the business, the Christchurch Gas, Coal, and Coke Company, Ltd, will end gas manufacturing on September 30. The chairman (Mr H. W. Revell) gave this message to the annual meeting of shareholders yesterday. At the same time he gave shareholders a warning not to'sell their shares pending further advice. Discussions were held yesterday before the meeting and would continue that could affect the company ownership and therefore the value of the shares, he said.

“Shareholders should therefore not sell shares until a further statement is made during the first week of August,” said Mr Revell. Brierley Investments, Ltd, has a holding of 49.1 per cent in the company, and is represented on the board by Mr T. J. N, Beyer. The company has 640 individual shareholders.

The asset backing of each $1 share in . the company $4.23, using the company's valuation of its land. This is $1,778,645, and includes the 13-acre Moorhouse Avenue property and an acre at Byron Street. This is a 1977 private valuation, and the accounts list a 1979 Government valuation as $2,170,900. The share’s most recent price to Monday, was $3.10. Of gas making, Mr Revell said that the company had the Government's approval to stop manufacturing and distribution from March 31, but because of the needs of hospitals in particular supply, has been continued, always

with the “absolute condition" that this should not create working losses for the shareholders to bear.

The Princess Margaret Hospital, the company's last hospital customer, will switch to another fuel from July 31. In his prepared address for the meeting, Mr Revell had indicated that, if the company was not able to increase its tariff because of the price freeze, production would be stopped from then, and distribution would end when the gas holder was empty.

But he departed from this prepared address to announce to shareholders that advice had been received from the Government yesterday which would ensure the company would avoid trading losses on continuing the gas supply. Therefore the supply would not end until September 30, if the customers needed the fuel. (Most of the remaining customers are in industries needing gas flame for special purposes.) “With the termination of gas manufacturing we will have discharged our responsibilities to the community,” said Mr Revell. Staff numbers had been reduced from 180 in 1979 to 37, and by January there would be only 14. (Redundancy costs for the year were $464,327.)

These employees would be “heavily involved” in supervising demolition of the gas-making plant and restoration of the site. Provision of $615,000 had

been made for closing costs, but this might well be called upon for other-than-demoli-tion costs.

Replying to a questioner, Mr Revell explained that the company had been able to include redundancy costs in tariffs; this would no longer be possible from the end of September. The company has a liquefied petroleum gas plant at Byron Street, off Waltham Road, equipped with a 20tonne tank and a bowser, supplying L.P.G. to motor vehicles. The plant also supplies L.P.G. in containers for caravans and boats, and delivers 45kg cylinders of the fuel to restaurants.

Shipping problems mean that supplies are sometimes interrupted, and because motor vehicles are able also to run on petrol, theirs are the sales usually restricted.

Mr Revell told the shareholders that trading in L.P.G. and ammonia (storage facilities are to be built at the site for trading in this gas) would be the board's operations, but his review for the year reiterates that the board has continued to examine investment in development projects such as the production of carbon anodes and metallurgical coke from coal, and methane gas from cereal waste.

As previously announced, the profit for the year, after tax, depreciation, and closing costs was $588,415. The meeting confirmed a final dividend of 11 per cent, or 11c per share, of which 1.5 c will be from capital profits and' thus tax free to shareholders.