A. Ellis dividend first in five years

Press, 5 October 1984, Page 12

A. Ellis dividend first in five years

PA Dunedin Shareholders in Arthur Ellis Holdings, Ltd, yesterday approved the first dividend since 1979 and an increase in directors’ fees.

The chairman, Mr John Keegan, cautioned that the expansionary phase in the economies of New Zealand and Australia was not expected to be sustained at the level of recent times. A slowdown in consumer demand was expected and competition expected to intensify. The higher cost of imported components would also make devaluation a mixed blessing, Mr Keegan said.

“Notwithstanding these sobering and cautious thoughts, your company is much better placed to cope with the uncertainties of the marketplace. Directors and management are confident of maintaining the improving trend of recent years,” he said. “This confidence is backed up by substantial planned investment in modern plant, some of which will be located in Australia, and all of which will assist us towards lower production

and distribution costs, leading into a higher market share.”

Results for the first quarter were encouraging, Mr Keegan said. The managing director, Mr Keith Tyrrell, said the record turnover of $11,741,000 exceeded the previous peak in 1980, when the mattress division was still part of the company.

“I believe the current level of turnover reflects the increasing market acceptances of our products in the three areas where we now operate and I can report that we have achieved growth in all three — homewares, outdoors products and industrial products.” The other highlight of the year was the increase in jobs created during the year, particularly in Dunedin and Christchurch.

“Our production facilities, particularly in New Zealand, have been stretched to the limits and extended hours have been worked, which has meant very satisfactory levels of plant utilisation have been achieved,” he said.

One snag to the 6c dividend approved by the meet-

ing was the question mark over its tax-free status. At the time of the August announcement it was thought the whole dividend would be untaxed, Mr Keegan said, but now only 2.95 c had been so confirmed, “The remainder must be treated as .taxable until a final decision is received from the commissioner regarding the status of reserves arising from receipt of a regional development grant,” the chairman explained. “Your directors believe, under existing legislation, the reserves should be taxfree.” He said their belief was based on precedent but so many companies had applied to have the same kind of reserves stamped as taxfree that the Inland Revenue Department was having second thoughts. Arguing for an increase of directors’ fees to $34,000, Mr Keegan said it was a considerable number of years since the last effective increase — there was an increase in 1980 at the time the two extra directors from Northern Feather joined the board.