Recession in leather

Press, 26 February 1983, Page 19

Recession in leather

RA Wellington The Wellington-based hide processor, Colyer Watson, is facing a difficult year, but is remaining confident. The chairman, Mr C. R. Pearce, told shareholders at the annual meeting that the international leather trade, in spite of some earlier indications of recovery, appeared to have fallen back into a “torpid lack of activity and interest." Colyer Watson exports most of its products. “Many of our main selling outlets for tallow are experiencing payment and liquidity problems which today seem epidemic in international trade," Mr Pearce said. . “In our major trading area, particularly hides and

tallow, the first quarter’s results continue to reflect the general lack of stability and interest in world commodity markets." However, Mr Pearce said he was confident that the company would maintain its over-all profit position. Mr Pearce reported that the acquisition of North Canterbury Wool and Fellmongery, Ltd, had gone ahead with “a solid degree of success.” Colyer Watson acquired the remaining 50 per cent of NCWF last year after it had been placed in receivership. “From a substantially negative situation at the beginning of November, a break-even point was reached before Christmas,

and the plant has been operating at improving' revenue levels each week in January, to give a very satisfactory operating profit for the month," Mr Pearce said. For the year to October 31, 1982, Colyer Watson increased profits by 32 per cent to $1,160,000 ($877,000). Turnover for the year, however, was down at $61,319,000 ($70,604,000) because of the sale of a subsidiary — Ammo-Phos, Ltd. — whose contribution to turnover in the previous year had been $7,464,000 and slightly reduced product prices. Export incentives exceeded taxable profits. A 3.5 per cent final taxfree dividend was approved by shareholders, making a total tax-free dividend of 10 per cent. This is the first dividend since 1979.