Wiljef continues to restructure

Press, 11 October 1982, Page 29

Wiljef continues to restructure

Williamson Jeffrey, Ltd, is continuing its restructuring of the group, because of the tough economic conditions, the chairman (Mr D. E. Smythe) says in his review in the annual report for the year ended June 30. “Tighter conditions in the current climate of tight and expensive finance, the price and wage freeze, the serious deficit in thte country’s external trading accounts and continuing recession in the major Western economies will not make for an easy year." says Mr Smythe, Group operations are being examined to identify low performers and corrective measures taken will ultimately result in much improved net returns. The group general manager (Mr. D. W. Laidlaw) sees the economic outlook as not encouraging, with the freeze squeezing gross margins and affecting profitability. Mr Smythe says that the group traded in a static domestic market. Increased market share was gained by the paper division but there was a steep increase in stocks early in the second half which are now returning to acceptable levels. Wholesale stationery trading was again competitive and margins suffered. Mr Laidlaw says' more • than other divisions it was affected by changing patterns of distribution such those

caused by the import licence tendering scheme. International trade agreements such as Sparteca and CER are having an effect. But sales budget was exceeded because of a more buoyant North Eland market, particularly when South Island sales fell during the final quarter. Gross earning rates dropped because of increased volume of indent paper sales and a reduction in school stationary prices brought about by import licence exemptions and duty free imports from Fiji under Sparteca.

With gross inventories up 18.8 per cent, Wiljef is aiming at more effective control over gross margins and inventories by installing ICL computers in its wholesale branches. The three parent company divisions will all be on the new systems by July, 1983.

The machinery division acquired new agencies, and the product range has been streamlined. British EastLight exceeded budget targets and the Data Storage subsidiary is expected to break into profits this year. In it second year, Microtronic Systems exceeded expectation and sales-growth is forecast. Erasable pens boosted results by Scripto Pens N.Z. . , .. ... The accounts confirm the better trading and strength-

ened financial position of the group.

As announced, the group almost joined the $1 million profit club in its 60th year, with the $976,886 result 21.4 per cent higher than last year’s $804,886.

It was after tax of $403,821 ($358,604) and depreciation of $326,507 ($286,297). When capital profits from the sale of a Christchurch property are added the total result climbs to $1,041,782 ($994,749). Mr Smythe says “the profit position reported at the halfyear was sustained almost to the end of the financial year when some slowing up in the marketplace was experienced, particularly in certain areas of the South Island." The results include the $174,534 equity and dividends contribution from 20 per cent-owned Fabco Industries, Ltd, (last year $86,068) reflecting buoyant trading by the motor vehicle assembly industry. The non-equity accounted Wiljef group showed an 11.6 per cent increase in earnings. Return on average shareholders’ funds of $B.B million was 11.4 per cent. ’’■■Because of a recommended final dividend of 11c. from share premium account increased by the 1:4 cash issue in May, the total payout rises from 15c to 16c, requiring $470,794.