Marac half ‘difficult’

Press, 6 March 1984, Page 26

Marac half ‘difficult’

PA Auckland Marac Holdings says that in the second six months of its financial year it will seek a “satisfactory profit increase” to add to its 51.5 per cent December 31 half-year earnings improvement. Early last month Marac re- . ported equity-accounted profits of $6,758,000. The pro rata result the previous year was $4,461,000. The directors say in their mid-year report, released yesterday, that the first half was a testing period and that the second was also likely to be difficult. “It is likely the Government will continue to intervene in the market with interest rate

and lending controls. This is not a conducive environment to operate in, and is likely to have some impact on trading in the second six months of the year.” However, they say Marac’s established operational base should enable it to post a satisfactory profit improvement in the half-year to March 31. A "steady inflow” of funds continued to be injected into Marac’s range of investment opportunities. '“Savings activity was particularly strong, with Marac Building Society recording a growth in funds over the six months of 56 per cent to a closing level of $67.3 million,”

they said. Branch profitability had been restricted by the Government’s 1 per cent a month credit growth limitation. However, efficiencies had been maintained “due mainly to economies in operations and a holding of margins.” The directors say the performance of Marac’s merchant bank was less satisfactory. It increased its business base but was unable to post a similar lift in profits because of keen competition. “However, the company is well placed to participate in any growth in the economy with its newly established business areas of foreign exchance and futures,” they said.