Wiljef sales, profit below budget

Press, 2 November 1982, Page 26

Wiljef sales, profit below budget

The pre-tax profit of Williamson Jeffery, Ltd. for the first three months of the present financial year was 7.8 per cent below the profit for the same period last year, shareholders were told at the annual meeting here yesterday. However, the directors expected an improvement in the second three months, said the chairman, Mr D. E. Smythe. Nevertheless, they believe that the budget revision at the half year mark would reveal a lower level of profitability than originally anticipated, he said. Earlier this year, the directors and management accepted an aggressive, but what they considered to be an achievable budget, for the 1982/83 year, Mr Smythe said. “For the first three months, mainly because of a very slow July, sales at $8 million were 6.4 per cent below budget. “On the other hand, adjusted for the sale of J. A. McKay last year, sales are 14.3 per cent ahead of the first quarter of 1981, but this

is barely in line with inflation. “Although trading conditions in the current circumstances are not expected to improve, management expects the sales deficit against budget to reduce by Christmas in some areas; over all. group sales for the first half of our financial year are not expected to reach budgeted levels. “Generally, the worst affected geographical area is the South Island, but this is probably not common only to Wiljef,” he said. Group expenses are in line with budget for the year to date. On the longer term outlook, Mr Smythe said: “Trading conditions are far from easy in these days of recession and my reading is that it will be a long time before New Zealand enjoys an economic turnaround. Even if the major northern hemisphere economies do begin to recover soon, one look at our balance of payments deficit, total budget deficit, and still far too high a rate of inflation compared with our major trading partners,

bears out my expectation of a hard road ahead. “Wiljef must accept that it will be trading in a static domestic market for some time yet. “As reported, the directors and management are taking corrective measures in those areas of group operations which are not performing up to expectations or up to required margins. The object is to increase the net return on funds employed by the Wiljef Group. “Rationalisation with Printing and Packaging Corporation, Ltd, is still continuing in those areas of operations where it is possible. Where action has been taken, benefits are beginning to emerge. Also, Wiljef is aiming at greater utilisation of its own assets and management is continually seeking new opportunities for acquisition.” As part of the “honing” process, a property in Christchurch, which had been owned for some time with the object of building a company head office on it, has been sold — resulting in a small realised capital gain.