Lane Walker Rudkin sales and profits above budget

Press, 28 October 1982, Page 25

Lane Walker Rudkin sales and profits above budget

Sales and profits of Lane Walker Rudkin Industries, Ltd. were well ahead of budget in the first four months of the current year, the chairman. Dr G. B. Battersby told- shareholders at the annual meeting yesterday. "However, our information from the retail sector indicates that retail selling slowed down from about the beginning of September in all product areas, including apparel. This must ultimately be reflected in the company's sales. Against this is the additional spending power going into consumers’ hands by virtue of taxation reductions which may stimulate further spending,” • he said. ‘‘lt is difficult to forecast the effect of these balancing influences but your directors are confident that its management team is well placed to take- advantage of any opportunities that may arise, and prepared for any downturn in the economy. "If we project the results after three months of trading in this current year, then we could look forward to an excellent result. However, the domestic economy is likely to deteriorate as the financial year progresses, but with our involvement in exports we should still have a good year. Our new projects give us considerable cause for optimism for the future." Dr Battersby said. The company's export drive continued to be successful. with sales for the first three months of $5.4 million compared with last

year's figures for this period of $1.9 million. Although some lessening in the growth rate must be expected, the commitment to export had reached a level where it had been necessary to reappraise the manner of doing business in North America, he told shareholders. “... we are in the process of setting up a joint venture company in Canada with an experienced and internationally successful company. This joint venture company will market our Canterbury leisurewear range and may commence manufacturing in Canada if New Zealand production becomes uneconomic because of changes in tax incentives or tariffs. In the near future we will probably undertake a re-organisation of our operation in the U.S.A, to secure our future in that market."

The directors are taking a positive attitude on C.E.R. and believe in the concept of Australasia as one market. For the time being, however, C.E.R. would have little direct impact on the group, Dr Battersby said.

"We believe that in the field of fabric selling, our technology and skills should enable us to gain more from the Australian market than our Australian counterparts can from the New Zealand market. On the negative side there are still some points within the C.E.R. agreement which require satisfactory definition before we commence fabric marketing into Australia.

"Garment making under C.E.R. is on the deferred list until 1986 or 1988 so little development can take place

in the meantime. Nevertheless with the long term effects of C.E.R. in mind we are proposing a major expansion of our Australian presence. Details of our proposals must for the time being remain confidential, but I can tell you that in the near future we expect to have a significant brand identity and manufacturing operation in Australia." Of the Bing Harris acquisition Dr Battersby said that the annual accounts disclosed indirectly the purchase of a substantial interest in this group of companies.

“The reason for not making a more direct reference was that at the time of printing we were uncertain as to the time and content of the announcement of the purchase. The result is that we have acquired 48 per cent of Bing Harris and Company, with Brierley Investments having 51 per cent. In terms of voting power and appointment of directors we share all controls equally.

"The rationale of our investment is that by using our skills in the apparel textile field and by using Brierleys' investment skills we will have a profitable investment at a purchase price well below the value of the assets acquired. "Evidence to date suggests that the Bing Harris group will produce a satisfactory result in the current financial year. Our acquisition of the 48 per cent interest is retrospective to November, 1981, but we have not yet taken into account any profit produced by the Bing Harris group."