Endeavour reforms Cyplas division

Press, 27 July 1984, Page 24

Endeavour reforms Cyplas division

Endeavour Services Corporation, Ltd, expects a better performance from its troubled car-accessory, Cyplas division, in the current year. The Endeavour annual report says that the Cyplas Australia division has finally been closed with all products for that market now produced in New Zealand. “This rationalisation of the two markets eliminates loss and provides extra profit-earning potential for the New Zealand company.” The United States operation would continue in order to determine the most appropriate course of action in that market. The European Cyplas operation sustained considerable pressure during the course of the year with a downturn in automotive sales among its major customers.

As reported, Endeavour made a $1 million provision against any fall in the value of its investment in Cyplas. Endeavour’s managing director, Mr Neil Plowman, says in his annual review (hat the 21 per cent higher group net trading profit of $3,356,516 reflected a strong performance from the Deanes operation, a steady

result from traditional activities and was after a loss of Cyplas. “Although Cyplas results were anything but satisfactory, the over-all group result showed a significant improvement over last year. “Non-recurring costs in Cyplas have been substantial and we now look forward to an improved result.” The price paid for the purchase of Deanes Industries, Ltd, shares was substantially less than the shareholders’ funds at March 31 last year. Those assets which were surplus to the group’s requirements were sold. Land and buildings retained were revalued in accordance with the Endeavour Group policy and surpluses arising from this revaluation are included in the extraordinary item. Last year a rationalisation provision was made in

the balance sheet to cover costs associated with the rationalisation and integration of Deanes. Most of this has now been completed; however an amount of $1,000,000 was retained to provide for any future costs, Mr Plowman says.

The profit increases the return on average shareholders’ funds from 14.7 per cent to 15.6 per cent despite a $1.5 million revaluation of properties.