Winstone interim jumps 83 p.c.

Press, 15 November 1984, Page 30

Winstone interim jumps 83 p.c.

Winstone, Ltd, boosted its net profit 83 per cent to $12,368,000 in the half year to September 30. The company’s operating profit for the period of $19,782,000 was a 125.4 per cent jump on the previous corresponding six months. Operating profit includes taxation credits relating to export sales of $1,768,000 (previously $1,146,000). The net profit is after a provision for taxation of $7,472,000 ($2,029,000). It is also after minority interests in the losses of subsidiaries totalling $58,000 ($13,000). No associated company results have been equity accounted for the half year. The Winstone results were achieved on sales up 28.5 per cent to $188,322,000. The company had a 47 per cent rise in net profit after extraordinary items to $10,032,000. Extraordinary items totalled a debit of $2,336,000, compared to a credit of $74,000 in the 1983 half year. The Winstone directors said the main extraordinary items were realised exchange losses and amortisation of unrealised foreign exchange losses caused by devaluation, and costs associated with the purchase of the Government’s prefer-

ence shares in a subsidiary company. These were offset, in part, by gains arising’ from the sale of investments together with the change in the valuation of sinking funds.

The directors said demand in the building sector remained at buoyant levels during the period. “Commercial building activity strengthened while new housing and home renovation and improvement markets continued at a high level. “An element of the home renovation and improvement demand was brought about by the expectation of post devaluation price increases and the expiration of the price freeze. These factors may impact on that sector in the second half,” the directors said in a statement.

The international pulp market had improved, with increased levels of demand and higher prices evident during the review period.

Current indications were that domestic demand would continue for the rest of the year at levels similar to those of the first six months.

“Whilst the Budget postponed a major review of the

assistance provided to the housing industry until next year, it included some elements which will be helpful in maintaining output at current levels.

“This factor, coupled with finance now being available, albeit at high interest rates, should ensure housing sector stability at least for the ■ balance of this financial year,” the statement said. The Karioi mill, which exports all its output, would be disadvantaged by electricity increases, road user charges and increased timber costs. None of these were recoverable in international markets, but despite this, further efforts to cut costs, and improve efficiencies, quality and marketability would “ensure the mill’s ability to make a major contribution to the group’s profitability.” The rate of profit growth in the second naif may not be as strong as that for the first, the directors said, but they believed the year’s result would be “comfortably” ahead of the previous year.

Winstone paid on October 30, an unchanged interim dividend of 3 cents per share on its increased ordinary share capital.