J H Impey optimistic about demand

Press, 22 June 1984, Page 10

J H Impey optimistic about demand

If its 1984-85 plan is achieved, James Hardie Impey, Ltd, will show a significant profit improvement, says the company’s chief executive, Mr ’S. C. Brown, in the annual report.

Investment expenditure already incurred should make a substantial contribution during the year. The year’s result was affected by the additional interest costs of SI.IM associated with the funding of new projects.

The company installed a S6M fibre-cement sheet machine which will substantially increase production. Last year, the lack of production capacity meant that the company was unable to capitalise on market opportunities, he says.

The chairman, Mr D. K. Macfarlane, says that the company knows that there

is a pent-up demand for housing, and that the opportunities to expand trade through Closer Economic Relations (C.E.R.) agreement are growing.

“I believe that the action taken by the group to increase its capacity to supply the building market with a broad product range, and the capacity to make C.E.R. work because of the link with James Hardie Industries (of Australia), will help in the year ahead,” he says.

The total group net profit fell 9.8 per cent to $7,801,000 in the 12 months to March 31, the second full year of operation since the merger between Phillipps and Impey and James Hardie Industries. Included in the result were $lO,OOO ($6OOO previously) from associated companies and extraordinary profits of $53,000 ($284,000 loss).

The extraordinary item was after allowing for a loss of $255,000 because of the decision to stop making building boards containing asbestos.

Sales increased 10.6 per cent to $118,589,000.

The profit was after providing $304,000 more for depreciation at $1,807,000, but $2,990,000 less for tax at $2,420,000. A recommended final taxfree dividend of 9.25 c a share gives a steady annual rate of 15.25 c a share (30.5 per cent). The dividend requirement is $3,310,000 and it is covered 2.4 times by the profit.

Shareholders' funds improved $4,370,000 to $61,256,000, including steady ordinary capital at $10,852,000.

Working capital rose $2,739,000 to $31,631,000, but the current ratio fell from 2.6 to 2.0 to one.