Masport profit hit by shipping delays

Press, 29 May 1985, Page 36

Masport profit hit by shipping delays

Masport, Ltd, Auckland manufacturing engineer, reported a 10 per cent increase in unaudited tax-paid trading profit, to $4,303,000, in the year ended March 31. Extraordinary expenses of $153,000 (1984, gains of $102,000) reduced total net earnings to $4,150,000 ($4,018,000). The result, after deducting tax of $972,000 ($717,000) and minority interests of $127,000 ($30,000), was earned on group turnover up 55 per cent at $78.5 million ($50.8 million).

Contributing to turnover was nine months trading from the newly-acquired Australian subsidiary, Barlow Marine, Ltd, which was able to break even during a period of major restructuring. However, directors report that Barlow’s trading for the first two months of the current year is buoyant, and the prospects for a useful contribution to group aftertax profit for the year end-

ing March 31, next year, look promising.

The directors are recommending a 6 per cent (3c a share) final dividend, to be paid from capital reserves tax-free to shareholders who so elect.

The chairman of Masport, Mr L. E. G. Richardson, described the result as understandable in light of fluctuating exchange rates and unexpected shipping delays. “Had it not been for these reverses, we would have exceeded our prospectus profit forecast,” he said. “As it was, we substantially exceeded turnover projections by some 55 per cent.” Mr Richardson said it had been anticipated that the devaluation of the New Zealand dollar would be of significant benefit to the company.

“Although there was some gain short term, higher import costs and a marked weakening of the Australian dollar in the first quarter of

1985 eroded margins,” he said. “Because of the Australian dollar’s strength and sterling’s weakness in the period under review, Barlow Marine’s margins in the competitive United States market were trimmed through adopting a policy of retaining turnover at competitive prices. "Since balance date, currency values have moved significantly in Barlow’s favour, and its competitive position has improved.”

Mr Richardson said that the unexpected shipping delays in the last quarter of the financial year resulted in a large volume of goods being kept in stock at balance date which should have been delivered and sold in Australia before March 31.

"The new financial year has started at a much higher level of activity than last year. Demand for our products is buoyant, and forward orders are at a satisfactory level."