Carter Holt 1:5 as profit jumps

Press, 26 May 1984, Page 22

Carter Holt 1:5 as profit jumps

PA Wellington The sawmiller and timber merchant, Carter Holt, Ltd, will make a one-for-five bonus issue after declaring a 30.4 per cent profit increase for the year ended March 31. The company said in a statement that total group profit for the year was $25,525,000 (1983: $19,570,000). This is after deduction of minority shareholders’ share of $10,218,000 ($7,813,000). Total sales, at more than $323M, were up 24.7 per cent, and export sales, at $132.8M, were up 22 per cent. Provision for tax was $10,678,000 ($3,987,000). Extraordinary income was $1,090,000 ($720,000), mainly from the sale of surplus land and buildings.

The directors will recommend a final dividend of 13 per cent (6.5 c per 50c share), which, with the interim dividend, paid, will make an unchanged total payment for the year of 22 per cent (11c per share). The bonus issue will apply as at July 10. The final dividend is payable on July 23. Dividend cover this year is 2.96 times after including provision in respect of the bonus issue. Last year the cover was 3.09 times. The depressed domestic market conditions evident during the second half of the 1982-83 financial year continued to affect activity seriously in the first half of this trading year, the company said. “During the course of the second half, however, activity quickened rapidly on the domestic scene and while it was not sufficient to fully offset the earlier serious decline it was nevertheless a significant influence on the final reported result, and further serves to confirm quite a strong start for the first half of the 1984-85 financial year,” it said. “While this situation was developing the Australian market continued to sustain its strength and at the same time the two major international joint ventures of Pan Pac and Sealord maintained their stability, thus enabling a favourable overall group profit trend to be maintained.” It said other jointly

owned and associate companies, in particular, Wood Export, Ltd, Canterbury’ Timber Products, Ltd, and Henderson and Pollard, Ltd, also contributed significantly to over-all performance. The Carter Holt directors said it appeared that a sustained economic revovery was under way in all of the major countries with which the firm traded. “The strengths of Australia, the United States, and Japan, in particular, are of importance to our resource based trading in the forest and fishing industries. “While we believe that our performance for 1984-85 will be satisfactory, it should be noted that the pulp and paper industry in Japan is not expected to fully recover from the effects of international recession until late in the new financial year. “For pulp, therefore, our concentration is based more on additional added value content primarily through energy input thereby offsetting those negative influences still affecting world markets for newsprint.” The company said group liquidity was strong. The company said the earning rate on average total shareholders’ funds was 20.3 per cent before the deduction of minority interests and 17.8 per cent after allowing for that deduction. Last year’s rates were 20.6 per cent and 17.2 per cent respectively.