Wattie profit for 83-84 first half up 14.5 per cent

Press, 12 April 1984, Page 26

Wattie profit for 83-84 first half up 14.5 per cent

PA Wellington Wattie Industries, Ltd, recorded a 14.5 per cent increase in after-tax earnings during the half-year ended January 31, 1984, compared with the six months to January 31, 1983. The directors say the company expects to maintain present sales and earnings for the rest of this financial year and expect to report a very satisfactory result for the 1983-84 financial year. For the previous corresponding six • months (to January 31, 1983), after-tax earnings were down 11.8 per cent on those for the still earlier corresponding period (to January 31, 1982). Last year, the directors attributed the poorer result to the effects of the price freeze on sales margins.

In the six months to January 31, 1984, after-tax earnings reached $13,660,000 ($11,934,000 in the previous corresponding half-year) on sales worth $310,854,000 ($290,539,000). Income tax paid climbed 7.7 per cent from $3,591,000 to $3,867,000. Earnings after extraordinary items jumped 58.7 per cent to $23,085,000 ($14,543,000), the statement said.

Basic earnings an ordinary share were 21c compared with 16.8 c for the same period last year. With Wattie’s share of associate-company after-tax earnings, $8.599M ($5.209M), the total equity tax-paid earnings, at $19.508M, are up 32 per cent (from $14.784M).

Included in associatecompany earnings are two months of the equity earnings of Dominion Industries, Ltd, in which Wattie’s owns a 50 per cent share and which in turn holds 25 per cent of the capital of N.Z. Forest Products, Ltd. Extraordinary items reported, $3.577M, include, first, gains made on the sale of surplus warehouses in Wellington and Auckland arising from the J. Wattie Canneries decision (reported in the 1983 annual report) to deliver to its customers in those regions by direct distribution from the Hastings and Gisborne factories; and, second, the insurance proceeds from the loss of a fishing vessel.

The directors said the increase in sales was particularly pleasing for two reasons: first, because it came from increases in the volumes of goods sold rather than from price increases; and second, be-

cause it came from each of the three operating divisions within the Wattie group. At the annual meeting in December, 1983, the directors reported that export sales for the first quarter were buoyant. This trend has continued for the second quarter and export sales are a little over $8 million (36.9 per cent) ahead of export sales for the first half of last year. Sales of frozen vegetables to Australia and South-East Asia have increased substantially, as, too, from a smaller base, have sales by the cerealmilling division.

The board declared an interim dividend of 6c an ordinary share (last year 5c an ordinary share) which will be paid on the one-for-five bonus issue announced on March 14. Of this dividend, 2c a share will be taxable. The interim dividend is payable on June 11. The directors say good progress is being made with new investments in foodprocessing ventures in South-East Asia. Further investment is also being made in a number of New Zealand processing plants to take advantage of some excellent opportunities to export increased volume of canned and frozen foods.