Kingsgate bounces back

Press, 3 November 1984, Page 27

Kingsgate bounces back

PA Auckland A dramatic $3.3 million earnings turnaround has put Kingsgate International Corporation, Ltd, in position to report a net profit of $2,142,000 in the half-year to September 30. The latest result, presented yesterday to an extraordinary meeting of Kingsgate shareholders, compares with a net loss of $1,304,000 in first half 1983.

It includes a tax credit of $270,000 (credit $146,000 in first half 1983). Turnover increased by 49.8 per cent from $7,577,000 to $11,353,000 in the sixmonth period. The deputy chairman, Mr Brian Taiboys,- told the meeting there were three

main reasons for the profit turnaround. They were; the contribution now being made by the Hyatt Kingsgate, Rotorua, and the Kingsgate convention centre in Auckland; higher room rates in hotels generally; and offshore financial funding and professional management of the company’s assets.

Auckland’s Hyatt Kingsgate is at present undergoing a $l2 million refurbishing programme. The hotel is expected to reopen in February.

Mr Taiboys said that,

despite the improved trading position, the company expected further rationalisation in some areas of the ’ group’s undertaking. There would be extensive development of interests in Christchurch and Queenstown.

Nevertheless, he said, the directors were confident of a satisfactory result for the year which ends on March 31.

Due to accumulated losses, it would not be prudent to suggest a precise time for a return to the payment of dividends, he

said, but, should present trends continue, an ordinary dividend could be paid in respect of the March 1986 year.

The extraordinary meeting unanimously approved an increase in nominal capital from $75,000,000 to $200,000,000 and a four-for-five bonus issue of ordinary shares.

Also approved was a resolution that holders of the company’s 12 per cent convertible preference shares should participate in the bonus issue as their shares convert.