Winstone 51 p.c. ahead

Press, 10 December 1982, Page 14

Winstone 51 p.c. ahead

PA Auckland Winstone. Ltd. has further consolidated its strong earnings growth of the past 18 months with a 51.2 per cent increase in net profit to $7,125,000 in the half year to September 30. The result, which compares with 1981 first half earnings of $4,712,000 and follows a second six months which yielded $7,631,000 for record 'l2-month earnings of $12,343,000. includes a tax credit of $930,000 ($1,533,000) and $55,000 ($98,000) as share of retained profits of associated companies. Extraordinary items of $2OOO ($885,000 loss), arising from profit on sale of assets less unrealised exchange losses, are not included and raise total net earnings to $7,127,000. External sales were 9.4 per cent higher at $135,376,000. A steady interim dividend of 3c a share (6 per cent) has been declared and will be paid tax-free from realised capital profits on February 4. ex January 17. The directors say they

have not changed the viewexpressed in June that shareholder benefits should be reassessed, but this will not be appropriate until the Gov-ernment-imposed constraints on dividends are lifted, and the outcome of available pulp mill options is known. During the half-year issued and paid-up capital increased from $37,967,384 to $38,949,084 by the issue of 1,963,400 fully paid ordinary shares of 50c each to eligible employees at a premium of 10c a share. During the six-month period the group sold its 20 per cent interest in the Golden Bay Cement Company, Ltd, for $7.7 million in cash, and the results of this company are not now equityaccounted. The shares pass to the new owners, Blue Circle Industries, Ltd, in two stages. Half were transferred on August 31, and the remainder no later than July 31. The group also disposed of its 100 per cent interest in W. A. Herkt and Sons, Ltd, and Winstone (PNG) Pty, Ltd. Each of these sales was for cash. To strengthen the group’s presence in the plastics industry Winstone (Australia) Pty Ltd increased its holding in Key Plastics Pty, Ltd, of Sydney, from 30 per cent to 60 per cent, while Winstone Plastics, Ltd, acquired a 50 per cent interest in Plastic Granulators (NZ), Ltd, of Otaki. The chairman, Mr A. H. Winstone, said that the period proved to be most difficult for the subsidiary Winstone Samsung Industries, Ltd.

Although substantial progress was made in improving product quality, he said, this was offset by extremely adverse market conditions which affected sales volumes and selling prices. The net operating loss incurred was $5,167,000. against a 1981 first-half loss of $2,670,000. A major study was under way to determine the feasibility of establishing a newsprint machine at Karioi, but the results would not be known until about June. Mr Winstone said the gains from growth in the New Zealand economy in the 1982 financial year continued as acceptable trading conditions for most of the latest period. Sales weakened in September and October, but November saw some recovery. A substantial deterioration in liquidity which became apparent toward the end of the half-year, coupled with increasing uncertainty over international markets for exports, has contributed to a reduction in confidence in the short-term domestic future, he said.

Expected higher spending from the October 1 tax cut had not yet occurred. Building permit numbers and values had declined, and activity for the remainder of the financial year was expected to be at a level lower than the second half of the year. The group would be under pressure to - maintain the same level of profitability, Mr Winstone said, but, in view of the satisfactory first half, a worthwhile result for .the full year should eventuate.