Teltherm regroups to better fight downturn

Press, 3 August 1983, Page 25

Teltherm regroups to better fight downturn

PA Auckland It will be some time before Teltherm Industries, Ltd, feels the benefits of an upturn either in the economy in general or from a new momentum being instilled into the group, the directors say in the annual report. The new chairman, Mr J. D. 0. Ellis, and the managing director, Mr B. R. Tills, say that results in the present year have started slower than the company would like, and the half year to September will still reflect difficult times. Every sector of the group, has had to cope with declining markets and a highly competitive situation and, coupled with the freeze, these conditions have flowed over to the start of the new financial year.

A corporate reorganisation to increase efficiency and instill a sense of profit and performance responsibility has created four separate operating units within the group, the directors say.

Teltherm Instruments, McLean Information Technology, and the Australian marketing company have been combined to form the instrument and electronics division. “This sector is the main profit contributor to the Teltherm group and is approaching the new financial year with a more aggressive sales team.”

Mr Allan Best, previously group marketing manager, has been appointed general manager of the division, which has agencies with high technology overseas principals in Japan and the United States.

Pressure Die Casters and other ancillary manufacturing activities have been combined to form the engineering and plastics division under an associate director, Mr Peter McGill. A wider product range will be introduced progressively.

All consumer activities have been combined into the consumer products division under a new company, Teltherm Distributors, Ltd.

The fourth division comprises Welding Industries of Australasia, the joint venture with Alex Harvey Industries to manufacture under licence MIG industrial welding machines.

In a review of a “frustrating” March year for the group, the directors say manufacturing was affected by the loss of a sizeable Australian export contract for pressure gauges to South African competition. Prices based on very low wage rates were the main contributing factor.

“Locally, the lower levels of activity together with business lost through some relaxation of licensing has not been compensated for by orders from large scale projects.” The directors say that the company is actively looking at alternative investment opportunities. The report shows that the sale in March of the Newmarket property housing Teltherm Instruments manufacturing operations produced a total extraordinary profit of $178,748, comprising capital profit of $161,977 and depreciation recovered $16,771. With the acquisition of 51 per cent of the company by interests associated with with the families of Mr and Mrs A. R. Hawkins and Mrs G. A. Bayldon, Mr A. R. Hawkins has been appointed adviser to the group. The directors are “not convinced of the value of current cost accounting” and feel that publication of such accounts could be misleading. As reported, net trading profit fell from $550,018 to $338,196 in the March year on sales 9 per cent lower at $9,751,337. The consolidated balance sheet shows shareholders’ funds increased marginally from $3,236,150 to $3,305,857. Current assets were $5,318,014 (previously $4,889,937) and current liabilities $1,952,463 ($2,108,160). Proposed alterations to the company’s articles will allow shareholders to take bonus shares in lieu of dividends.