Winstone trading profit up 15%

Press, 4 December 1985, Page 41

Winstone trading profit up 15%

Winstone, Ltd, the Auck-land-based building supplies group, increased its interim profit before extraordinaries by 15.6 per cent to $14,309,000 ($12,368,000) for the six months ended September 30. In addition there were extraordinary profits of $656,000 as against extraordinary losses of $2,336,000 in’ the first half last year, bringing the bottom line to $14,965,000 ($10,032,000), an increase of 49 per cent. Turnover rose 96 per cent to $370 million ($lBB million). Tax took $6,902,000 ($7,472,000) and minorities took $37,000 (added $58,000). Interim dividend will be 3c a share to be paid on February 28. Subject to approval at an extraordinary general meeting on December 12, shareholders will be offered bonus shares in lieu of dividend.

The operating profit of $21,248,000 ($19,782,000) includes export tax credits of $1,405,000 ($1,768,000).

The directors said the environment in which the

group operated had been buoyant domestically and difficult in exports. Housing permits continued at levels above expectation and commercial activity maintained the impetus of the last months of the previous financial year. The home improvement market again showed growth. The export market was “testing,” with exchange rate difficulties adding to an already generally over-supplied demand. The Odlins Group performed in line with expectations, with solid results in most sectors. Production in the pulp mill exceeded all past figures. Total production for the financial year was fully sold, but the SUS/SNZ exchange rate relationship had seriously impacted profitability. Since balance date, industrial disruption eventuating from the fractured wage round affected results in two major subsidiaries in October.

“The balance of the financial year is expected to be demanding, with the combined effects of high interest costs, unfavourable exchange rates, the consequences of the high wage round, and inflation adding to the uncertain economic conditions within New Zealand,” the directors said. Rationalisation of the Odlins acquisition would continue as planned. Externally, it was unlikely export prices would firm in the markets to which group products are directed. The directors considered the result acceptable in the circumstances under which the group had operated. “The current return on investment is, however, less than satisfactory and an improvement is expected,” they said. “Although there are signs of slower growth in building industry activity, work already committed confirms a continuation of opportunities at present levels through to the end of the financial year.”