‘Wattie must look for other areas than food’

Press, 15 December 1983, Page 32

‘Wattie must look for other areas than food’

Wattie Industries bought into New Zealand Forest Products last month simply as an investment, the company’s chairman (Mr Wilf Morriss) said yesterday. He told shareholders at the Wattie annual general meeting that there was little potential for the company to expand its normal food lines in New Zealand. “The population of our country is not growing very much and people tend to eat much the same volume of food each year,” he said. Mr Morriss said that the purchase by Wattie and Goodman Group of some 23 million shares in N.Z.F.P., just under a 25 per cent stake in the forestry giant and worth an estimated SI6OM, was in line with the company’s objective of be-

coming more widely involved in processing the products of the land. Forestry was also an important growth area of New Zealand industry and as an investment N.Z.F.P. was financially attractive because the price of the shares was well below the true worth of the assets, he said. “The purchase of our interest in N.Z.F.P. is simply an investment,” said Mr Morriss. But he said that although Wattie now had substantial interests in the meat (through Waitaki N.Z. Refrigerating, Ltd) and forestry industries, the dominant activity would remain food processing and marketing. “That is our business — we know it better than any

other,” he said. Mr Morriss said this financial year had started well, with local sales for the first quarter up a little on the comparable period last year — and export sales were buoyant. “Our after-tax earnings for the first quarter are materially higher than last year’s first quarter earnings — even after adjusting the 1982-83 first quarter figures to reflect our change in the method of calculating our equity share of the earnings of Goodman Group,” he said. As previously reported, in the year to July 31 Wattie Industries made an aftertax profit of $35,023,000, an increase of 7.6 per cent over 1982.