Dom. Brew. ahead of predictions

Press, 4 July 1985, Page 28

Dom. Brew. ahead of predictions

PA Auckland Dominion Breweries, Ltd, has lifted net trading profit before extraordinary items by $5,127,000, or 42 per cent, to $17,329,000 in the year to March 31. The directors propose a one-for-10 bonus issue of ordinary shares and a taxfree distribution from realised capital profits of 9.5 c a share, comprising an ordinary final dividend of 7.5 c a share and a special dividend of 2c a share. The bonus shares do not qualify for this payout. Extraordinary profits of $18,245,000 ($1,805,000 in 1984) lift the 1985 bottom line to $35,574,000 ($14,007,000). These profits, arising from the sale of assets, include the realisation of $8,613,000 of revaluation reserves. The latest result was achieved on sales $l9 million higher at $339.5 million. Provision for tax increased by $3.4 million to $13,510,000. Minority interests absorbed $1,599,000, while the DB share of associated companies’ retained profits amounted to $1,509,000.

Provision for depreciation was $6.3 million ($5.8 million), and $B.B million

($8.5 million) was provided for interest.

An amount of $l.l million ($l.l million) of asset revaluation reserve was amortised. The directors say gross revenue increased by 6 per cent, notwithstanding the loss of revenue caused by strikes at the company’s largest brewery. Sales were also affected by the disposal of the nonliquor activities of Barraud and Abraham, Ltd, the effect of which is said to be $2O million. After-tax earnings on average shareholders’ funds increased from 7.8 to 9.6 per cent, but the directors say this rate of return is still inadequate. Shareholders’ funds, which increased to $199.9 million ($162.9 million), include the addition of $20.1 million from the revaluation of properties. Shareholders’ equity increased from 59.9 per cent to 66 per cent and asset backing per ordinary share from 259 c to 314 c. During the year DB sold its 47 per cent stake in Mount Cook Group. Settlement in respect of 20 per cent of that holding is reflected in the latest result.

The company also sold what it calls non-strategic investments in McWilliams

Industries, Ltd, Cooks New Zealand Wines, Penfolds Wines, Ltd, The Canterbury (NZ) Seed Company, Ltd, and James Cook Hotel, Ltd. Asset sales included the disposal of a further 82 hotels and taverns, bringing the total sold in the last two years to 96. The final dividend of 7.5 c (15 per cent), together with the 2c special distribution, will be paid on August 22, ex August 5, and brings total payout for the year to 15c a share. The bonus shares to be issued will rank equally in all respects with existing ordinary shares and will participate in all dividends to be declared in respect of the 1986 year, beginning with the interim to be declared in December.

Holders of specified preference shares who exercise their option to convert their holdings into ordinary shares on October 1, 1986, will have their conversion entitlement increased from the present ratio of four ordinary shares for every five special preference shares to 4.4 ordinary shares for every five special preferences held at the date of conversion.