‘Press’ 1/2-yr target profit $1.4M

Press, 13 July 1984, Page 8

‘Press’ 1/2-yr target profit $1.4M

The Christchurch Press Company, Ltd, forecast a pre-tax profit of more than $1.4 million in the six months to September 30, based on present trading figures, shareholders were told at the company’s annual meeting yesterday. In the corresponding period last year, the company made a pre-tax profit of $906,795.

The chairman, Mr D. C. Gould, said that at the end of the first six months of last year’s trading, the heavy burdens of depreciation and financing charges for the new press, and the effect of the “ruinous strike at Kawerau,” had reduced the pre-tax profits by little short of 20 per cent.

Later, however, a 6.8 per cent increase in the year’s classified advertising volume, and strict control of costs, enabled the company and its subsidiary, D. N. Adams, Ltd, to increase its final pre-tax profit 17.9 per cent above the 1983 figure, he said.

The improved trading, and the heavy depreciation, had given a substantial increase in actual, as opposed to estimated, cash flow, and the company had been able to make significant progress in reducing its offshore loan, Mr Gould said.

Consequently, the company’s foreign exchange exposure was now reduced to

only 30 per cent of the $3.7 million borrowing. “The loan was made by the British Government’s Export Credit Guarantee Department, and runs until February, 1987, although at the present rate of progress it would be suprising if the accommodation will be required for that length of time,” Mr Gould said.

The price increase of 33.5 per cent for Tasman newsprint and other cost increases meant that the cover charge of the newspaper had to remain at 25c and advertising rates had to be increased. The 1984 audit confirmed a further increase in circulation to 83,000 copies a day by “The Press.” This was achieved when the cost of the paper had risen and the population was static. Of the voluntary-unionism dispute between a member of the staff of “The Press” and the New Zealand Journalists’ Union, Mr Gould said that, throughout the unfortunate episode, the company had acted in the best interests of total staff, the shareholders, readers, and advertisers. “Your directors, however, deplore the attack made on the company by a Minister of the Crown, in extravagant language, discreditable both to himself and his office.” The recent Reuters float was successful, and the

ultimate benefit to the Christchurch Press Company was currently estimated at about $2.25 million. The benefit would be in cash in the next few months, and shares which must be held at least until 1986. “The level of circulation, together with the higher volumes and our increased share of the advertising market, which in recent months has increased from 53 per cent to 57 per cent, in round figures, augurs well for the coming year, particularly when the reduction in financing charges is borne in mind,” Mr Gould said. The company was in a strong position, and very materially more so than directors had dared hope when ordering the new equipment, then valued at more than twice the current value of shareholders’ funds. “For all these reasons your board suggests that shareholders have good cause to retain their stock.” In response to a question from a shareholder, Mr D. J. Corboy, as to why the company had not bought the Southland Times Company, Ltd, Mr Gould said that at that time such a move would have raised more problems than the company could have faced. (The Southland newspaper was bought by Independent Newspapers, Ltd). The primary object of the Christchurch Press Company was to provide the best newspaper in the province for its readers and to retain the company’s local ownership, he said.