Published percentage profits wanted

Press, 26 November 1982, Page 26

Published percentage profits wanted

Parliamentary reporter

Published reports of company net profits should show the profit as a percentage of shareholders’ funds, a Parliamentary Select Committee has been told.

A Wellington man, Mr D. W. A. Faulkner, told the Commerce and Energy Select Committee studying the Companies Amendment Bill that news media publication of net profits rarely related them to shareholders funds, giving a misleading impression. The net $9.6 million profit by L. D. Nathan reported this month could represent a poor return of only 8 per cent or a “rip-off” of 28 per cent, he said. Published accounts of pub-

lie companies as circulated to shareholders showed the percentage, and news reports should also.

“As companies and groups grow larger, so will profit figures. Publication of profits of companies such as Watties does not register in a form that can be understood,” Mr Faulkner said.

“But a percentage return will. The average New Zealander can then compare Watties return with something he can understand: his home mortgage interest rate, his savings. account, or debenture stocks,” he said. An amendment requiring this would “let the public at large know just what the real worth of those profits is to the investor.”