Freeze limits E. Adams profit rise

Press, 13 June 1984, Page 31

Freeze limits E. Adams profit rise

The price freeze hit the profit of Ernest Adams. Ltd. for the year to March 31. but the directors regard a 5 per cent rise as satisfactory. The Christchurch-based cake manufacturer reported to the stock exchange yesterday a net profit after tax of $638,500 ($607,200 in the previous year). The result was achieved on an 11 per cent increase in sales, seen as excellent by the directors. “In view of the fact that there had been no increase in our prices since March 1982, it represents an 11 per cent increase in real terms," they said.

The company had been able to absorb many cost increases during the year without raising prices “and still show an increase in profit.”

The result is after deduction of extraordinary items of $1,123,000 (up from $1,102,700) and estimated tax of $484,500 ($495,500). The company also had an

extraordinary profit of $lB9 from the sale of an investment. "The year should be regarded as a time of consolidation. in which the spectacular gains of the previous year were further improved upon,” the directors said. They recommend a final dividend of 10c a share (10 per cent) from retained earnings to shareholders on the register at July 13. Together with the interim dividend of sc. paid last December 14, and a second interim dividend of 5c on March 21. the total for the year is 20c a share (compared with 15c in the previous year). The directors will recommend to the annual meeting a one-for-five bonus share issue on shareholdings as at August 30. The meeting will also be asked to raise the authorised capital of the company to $2,500,000 by the creation of 1,250,000 additional ordinary $1 shares.