BNZ Finance lifts profit 42 per cent

Press, 21 April 1984, Page 21

BNZ Finance lifts profit 42 per cent

BNZ Finance Ltd, increased its group net profit 42 per cent in the year to March 31, and is paying a steady final dividend of 6.25 c on all shares. Audited net profit increased to 16,591,000 from 54,651,000 last year after tax of 56,012,000 (last year, 55,240,000) was provided for. The year’s profits gave a return of 26.1 per cent on average shareholders’ funds expanded by the three-for-seven cash issue made last September and a 53.7 per cent return on average capital after adjusting for the one-for-three bonus issue made on March 30. The directors have resolved to recommend a final dividend of 6.25 c a share (12.5 per cent which is payable on all shares including those allotted in the September three-for-seven cash issue and the March bonus issue. Together with the interim dividend of 4.25 c a share, this makes an unchanged dividend rate for the year of 10.5 c a share (21 per cent) in respect of those shares which ranked for both the interim and final dividends.

As with the interim dividend, shareholders will have the option of receiving the final dividend tax-free. Based on the current level of elections made by shareholders, the directors expect that reserves will enable the company to pay all dividends over at least the next four years so they are tax free. BNZ Finances’ chairman, Sir George Chapman, says that the results reflect the benefits of the company’s strong position in the wholesale money market and the recent growth in commercial finance activities. BNZ Finance is now one of the largest whoisale money market dealers in New Zealand and substantial volumes of deposits both by number and value for terms ranging from 24 hours to five years are handled each day through the company’s four offices, he says. The company is also an active dealer in commercial bills, negotiable bank securities and New Zealand Government Stock. Institutional investor interest in New Zealand Government Stock has increased as a

result of the new Government stock tendering system. During the year, BNZ Finance participated in the tenders and was an active dealer in Government securities. At March 31, the company’s portfolio of New Zealand Government Stock amounted to 5112 million. “BNZ Finance’s strength in the wholesale sector of the capital market materially assisted the liquidity of the company and permits increased flexibility in its activities,” Sir George says. The directors estimate that there will be sufficient in reserves to pay all dividends tax-free for at least the next four years.

Mr I. D. Johnston has been elected the president of the New Zealand Wholesale Hardware Federation. Mr Johnson is the area manager for John Edmond, Ltd of Dunedin. Mr S. R. J. Keast of A. and T. Burt Merchants, Ltd, of Lower Hutt, has been elected the vice-president. Mr R. J. Majendie of Ballinger Industries, Ltd, of Wellington, has been elected the executive chairman.

Mr John Baird had been appointed managing director of Quality Bakers New Zealand, Ltd, which is part of the Goodman group. Mr Baird, who has a Bachelor of Science degree in mathematics and statistics, a Master of Engineering, a Diploma of Marketing and is a Rhodes scholar, will be responsible for a cooperative organisation of more than 20 bakeries. The group covers almost every metropolitan and provincial area of the country, and accounts for an estimated 50 per cent share of the domestic bread and smallgoods market.