Main problems behind it, says East Gas

Press, 13 July 1985, Page 24

Main problems behind it, says East Gas

The settling down problems of East Coast Gas Supply, Ltd, in the last financial year are mainly behind it, says the chairman, Mr D. F. McLeod, in the annual report. The advantages of natural gas, in cost and in trading, have captured the attention of the community throughout the company’s franchise area. The directors are therefore confident about the company’s trading, he says. The conversion of suburban areas to natural gas is expensive and can only be justified in the belief that availability will generate new consumers. “This momentum is increasing and sales of residential gas appliances have grown significantly,” Mr McLeod says. As reported, East Gas earned a group net profit of $1,099,496 in the year to March 31, compared with a loss of $52,363 in the previous corresponding period. The result included $9454 in capital profits ($86,925 previously), and last year $235,991 was written off as preliminary expenses.

Sales more than doubled from $4,957,313 to $10,449,552, and the pre-tax profit rose from $96,703 to $1,840,042. A deferred tax provision of $750,000 was made in the latest year. The depreciation provision rose $170,569 to $641,357. A final dividend of 3c a share gives an annual rate of 5c a share (10 per cent), the dividends being paid earlier than was forecast when the company was first listed in 1983. The dividend requirement is $500,000 and it is covered 2.2 times by the profit. Shareholders’ funds rose $599,496 to $5,305,073, including steady ordinary capital of SSM. Working capital stood at $309,429 compared with a deficit of $96,704 previously. The current ratio was 1.2 to one.