Brierleys looks on the bright side

Press, 27 November 1982, Page 20

Brierleys looks on the bright side

PA Wellington Brierley Investments. Ltd. was essentially optimistic for the 1982-83 year — but with qualifications,- its chairman. Mr Ron . Brierley, told the annual meeting. “It would be remiss not to recognise that we are experiencing probably the mosj severe recession, in the company’s 21 year existence," he said. “Any expectations lor 1983 must be heavily qualified by the unknown effects of what will clearly be an extraordinarily difficult year for most companies in our group." On a brighter note he said that the company has "never had more opportunities available to us than al present." “In overseas markets there is scope to invest almost unlimited amounts, even on the highly selective basis on which the group operated." But it was in New Zealand that the most clearly defined need for funds existed. “If it was ever true that the New Zealand operation was a poor relation to lEL it is certainly not so now. We intend to maintain the momentum of recent years.” Mr Brierley said that last year's accounts disclosed a very satisfactory ■ situation. “The most notable feature is probably the increase in total assets from $387 million to $603 million. In case this growth causes misgivings it must be said that we’ve not sought growth for its own sake but as a consequence of natural healthy profit expansion." About 70. per cent of the increase arose from equity-

accounting of Printing and Packaging Corporation. Ltd. in which the shareholding rose to 43 per cent during the year, and the 27 per cent interest in Consolidated Metal Industries — stemming from the merger with Cyclone Industries N.Z.. Ltd. Another $9O million related to increased investment in properties and some portfolios which now account for about half of total assets in the group, and which must be a source of great potential. Discussing the sale of Aurora Group shares, Mr Brierley said that because of the strong property interest in City Realties this shareholding was logically expendable when a buyer emerged at a good price in the current market. Brierleys netted $4.5 million from the sale on a group basis — "a useful addition to liquidity in the present climate.” Quoting the Minister of Trade and Industry, Mr. Templeton, as saying “the general aim of changes to the Commerce Act were to simplify commercial legislation and harmonise it with Australia as CER neared," Mr Brierley said the proposed change coqld not be made at a less opportune time. “It is likely to place many New Zealand companies at a distinct disadvantage with their Australian competitors.” The changes would not lead to increased competitiveness. This could be achieved only on a genuine national basis and must not

be merely an excuse for Government agencies to preserve and prolong the existence of uneconomic units io numerous fragmented industries. “The reality of the small and heavily restricted New Zealand economy is that it cannot afford wasteful and unnecessary duplication of facilities simply to promote an illusion of free competition which has long disappeared from most of the key sectors of the market. “It is much better to have one .or two really elfective companies in any industry than a myriad of smaller inefficient units: all the more when the real competition emerges from Australia br elsewhere overseas." It was imperative in New Zealand at present that some competition be positively eliminated by merger and rationalisation rather than by default, through potentially uneconomic concerns withering on the vine in a changing environment. “We hope that the Government will not rush n. a hasty pre-Christmas commii,.”’ Q nt on the Commerce Act pro posals, when it is clear that so much confusion exists in establishing any real harmony with the Australian system,” Mr Brierley said. On closer economic relations, Mr Brierley said the group was obviously well placed to co-ordinate complementary trading operations on a group basis through its operations on both sides of the Tasman. The wine industry was a possible example of this. CER was essentially a long-term consideration which would not replace the policies of evaluating each investment on a strictly independent basis. CER represented a healthier investment climate in both countries. To be really effective, ’CER must be supplemented quickly by free mobility of investment capital between Australia and New Zealand, he said. In these circumstances it was unfortunate that the Government appeared to be proceeding with a less welcome and desirable development: radical changes to the Commerce Act. Some of these proposals were "very strange indeed.”