CPD profit lift and 1:5 issue

Press, 12 November 1985, Page 27

CPD profit lift and 1:5 issue

PA Wellington Cable Price Downer, Ltd, is to make a one-for-five cash issue after lifting interim profit before extraordinaries by 10.7 per cent. Group, profit for the six months ended September 30 was $15,513,000 (114,001,000). Extraordinary losses of $259,000 (profit $810,000) reduced the profit to $15,254,000 ($14,811,000). The rights issue will carry a premium of 100 c, giving a total price of 200 c. For specified preference shareholders the offer will be 33-for-100. The interim dividend will be 12.5 c a share (12.5 per cent), to be paid on December 13. Books for the dividend and cash issue close on November 22. The new shares will not qualify for the interim dividend, but will count for the final dividend

next August The issue will raise $23,228,000 and will be used to finance capital expenditure programmes by operating subsidiaries, for repayment of maturing long-term debt and for working capital. Turnover for the six months was $323M (S27OM), up 19.7 per cent. CPD said equity-accounted earnings from its 20 per cent holding in Crown Corp were included from October last year. Thus they were not included in the comparative figures now given for the first half last year. Tax took $9,666,000 ($10,224,000). The chairman, Mr R. W. Steele, said four problems dominated all business decisions today — inflation, interest rates, the value of the

New Zealand dollar and productivity. “It has yet to be demonstrated that inflation can be contained at levels lower than those we have endured for the last two years, and the present wage round is certainly not conducive to expectations that inflation will reduce,” he said. “The prospect of higher overheads and a combination of present interest rate levels means that companies will have to look for greater productivity to maintain reasonable profitability. That message. has yet to be grasped by all members of the New Zealand work force.” Market share in all three merchandising companies had increased and gross margins had been maintained, except in retail sales of Toyota motor cars.