Chemby dips into reserves for div.

Press, 26 May 1984, Page 24

Chemby dips into reserves for div.

PA Auckland Chemby Industries has been forced to dip into reserves to make an unchanged $442,156 total dividend distribution covering the year to March 31. Operating losses of about $580,000 incurred by the manufactured products division of Chemby Engineering, with extraordinary liquidation losses of $465,000 involved with the closing of the division, reduced the group’s total profit to a mere $23,018 in the March 31 year. However, the directors have decided to keep the final dividend of 5c a share (10 per cent) because they are “confident of the group’s future” and that its “operating cash requirements are adequately covered.” The final distribution will be

made on August 14. With the 3.5 c interim dividend, it makes 3.5 c for the year. The unchanged total pay out’ means Chemby’s reserves will be reduced about $420,000 this year. The 1983 annual report shows total reserves at $4,198,780, but losses previously undisclosed at the manufactured products operation have caused a $174,840 downward re-statement. With the dividend payment, reserves at the end of March were nearly 15 per cent down at $3,604,802. On a brighter note, the group secretary, Mr Michael Braid, said management had opted to take all the manufactured products losses “on the nose” this year and would start the 1984-85 with a clean slate. Although group operating profit (excluding the extraordinary liquidation losses) dived 58 per cent to $487,877

from $1,160,958, profits from non-Chemby Engineering operations were only slightly lower at $1,066,817 ($1,093,692). Total turnover was 5.1 per cent up at $48.8M ($46.4M) on which pre-tax profits of $42,611 ($2,016,884) were yielded. Profitability was helped by a $173,113 tax credit ($503,125 debit), and $117,266 of profits from associate companies were added (1983: a $28,292 deduction). Minorities took $225,113 ($324,509). Chemby also announced it had bought the outstanding 20 per cent in Chemby Chemicals it did not already own in an undisclosed cash deal.