ACI International benefits from reorganisation

Press, 16 May 1985, Page 30

ACI International benefits from reorganisation

The group net profit of ACI International, Ltd, the major shareholder in Alex Harvey Industries, Ltd, rose 42.3 per cent to sAust6B.6 million in the year ended March 31, the directors announced yesterday. Group sales rose 8.0 per cent during the period, but excluding businesses sold and purchased during the last twelve months, the increase was 17 per cent, the ACI directors said in a statement. Profits before tax increased about 33 per cent, with Australia and New Zealand showing increases of 54 per cent and 39 per cent respectively. Other overseas regions show an over-all profit compared with a small loss last year, the directors said. The before tax profit breakdown: Australian operations sAustll3.2 million ($73.5 million); New Zealand operations sAust62.4 million ($45.0 million); other overseas operations sAustB.2 million ($1.2 million); resources sAust26.2 million loss ($985,000 profit). The directors said the resources group showed an operating profit in line with the company’s plans but the sAust26.2 million loss came after interest and financing charges were deducted.

The results were better in the second half of the year, although significantly affected by the movement of the Australian dollar, they said.

The depreciation of the dollar resulted in higher interest charges and higher amortisation of unrealised foreign exchange losses, which, together, resulted in additional charges of about sAust7 million for the full year, directors said. In addition, the Queensland power strike resulted in an estimated ?2m loss of profits.

The directors said that if current prices and exchange rates prevail, they expect present exchange losses on borrowings to be compensated by increased future sales revenue.

Major items which made up the extraordinary loss were the closing of the glass and fibre packaging operations of Singapore Glass Manufacturers, Pty, Ltd, sAustl4 million; the sale of Nylex Corporation, Ltd, and relocation of the plastics businesses retained by ACI, sAustll.3 million; and provision for closing two business segments in the 1985/86 /ear, sAust3.l million.

These losses were offset by profits on the sale of the public company Malaysian Containers (1974), BHD, sAust6.9 million; and the sale of City Brick, sAust2.2 million.

ACl’s chairman, Sir William Pettingell, said the after tax profit, a record for ACI, was encouraging and was taken into consideration by directors when the board lifted the final dividend to 8.5 cents. He said the results reflected the benefits of ACl’s policy of systematic rationalisation and reorganisation.

The success of the policy was clearly evident in the increase in operating profit as a proportion of sales, to 9.2 per cent from 7.6 per cent in 1984, Sir William said.