Exporters face problems

Press, 9 August 1985, Page 8

Exporters face problems

PA Auckland Sustaining the export drive is becoming increasingly difficult for UEB, the chairman, Mr Lyn Papps, told the company’s annual meeting in Auckland.

“The continuing strength of the New Zealand dollar and the current weakness of the Australian dollar is of major concern,” he said. “In real terms we are now selling goods to Australia and getting the same dollar

revenue as we were 18 months ago. We lost half our export performance tax incentives and production costs have risen during the interim period.” Mr Papps said the benefits of devaluation had been wiped out by the rising New Zealand dollar. “For a number of reasons, the outlook for the balance of this financial year is not clear.” UEB was experiencing strong demand on the local market and sales and profits

for the first quarter of this year were significantly ahead of last year’s figures. Since balance date the company had sold its hotel interests for $16.4 million and its 27 per cent Yates holding for “a substantial profit.” The company had decided to buy out its 50 per cent partner in Hycraft Carpets, Ltd, subject to Australian Foreign Investment Review Board approval. Manufacturing on both sides of the Tasman would be co-ordinated, along with marketing.

A profit was forecast for Hycraft in the current year. Shareholders approved an increase of 10 per cent in directors’ fees to $82,500 split between the 10 directors. UEB shares should be worth at least 200 c, Mr Papps said. He was replying to a shareholder who asked why the shares, trading at around 165 c, performed “so poorly.” Mr Papps said the one-for-eight bonus issue on May 23 had re-rated the shares, but they should be worth 200 or more.