Cooks reacts to loss

Press, 24 March 1984, Page 22

Cooks reacts to loss

Cooks New Zealand Wine Company, Ltd, plans a cash share issue and a restructure of its board in response to its recent trading loss. The company said yesterday a return to profitability was expected by the end of its financial year on June 30, but a further loss would be incurred in the current six months. “The market for wine continues to be extremely competitive with discounts reducing gross margins on all products," the company said.

Cooks had an unaudited loss of $1,489,000 for the half year to December 31. The results of the tradig loss and an asset revaluation, prompted by the present pricing situation would reduce shareholders’ funds in the six months to June by between $500,000 and $700,000, Cooks said.

The losses would reduce shareholders’ equity to an unacceptable level and the board now proposed a two-for-three cash shares issue. The issue would be made at par 60 cents a share and would be renounceable.

“As a consequence of the take-over of Hawke’s Bay Farmers Co-op, Brierley Investments, Ltd, is entitled to a beneficial ownership of approximately 50 per cent of the issued capital, and has indicated its intention to take up their share of the cash issue,” Cooks said. “The management of BIL is maintaining a close liaison with the management of the company and the board has decided that over the next 12 months it will be more practicable to have a reduced number of directors who work in a very close ‘hands on’ relationship with management.” Messrs G. C. Godare, G. W. S. Barker, J. E. Adame, G. Adame, J. Wallace have tendered their resignations from the board and Mr George Exton, the chief

executive of the company, has been appointed a director.