Kingsgate turns to $1.5M profit

Press, 29 June 1985, Page 21

Kingsgate turns to $1.5M profit

PA Auckland A turn-around of almost $5 million in trading profit has swung Kingsgate International Corporation, Ltd, into a net profit of $1,522,000 in the year to March 31. A year ago the company reported a net loss of $3,767,000. The latest result includes a tourist-promotion incentive tax credit of $903,000 ($585,000 in 1984). Extraordinary profits of $1,475,000 arising from the sale of properties lifted total net earnings to $2,997,000. The comparable figure a year ago was a loss of $2,764,000, reached after the inclusion of extraordinary profits of $1,003,000. The directors recommend that no dividend be paid. In the latest year gross revenues increased by 27.3 per cent to a record $26.8 million. This was achieved in spite of Hyatt Kingsgate Rotorua not being completed until

September and a substantial portion of the accommodation and revenue-generating facilities of Hyatt Kingsgate Auckland being closed, or operating at reduced levels owing to refurbishment. Directors say the reduction in revenue-generating units resulted in fixed costs and overheads being proportionately higher than normal. The increased revenues, well-managed borrowing costs, and favourable currency fluctuations facilitated the return to profitability. A four-for-five bonus issue was made in November following an asset revaluation, and this resulted in a 78 per cent increase in share capital to $53,355,000. This equity expansion, coupled with the group’s capital development programme, increased fixed assets by 55.1 per cent to $102,485,000. Authorised capital, previously $75 million, has been increased to $2OO million.