ICI forecasts a demanding year

Press, 14 January 1986, Page 30

ICI forecasts a demanding year

Employment opportunities are likely to be curtailed this year, says the chairman of ICI New Zealand, Ltd, Mr John Eddey, in the annual report. “The downward trend in business activity evident in the last quarter of the company’s financial year has continued and would indicate that in the year ahead the business environment will be demanding and likely to curtail business opportunities.” The longer-term outlook for the economy is promising, providing inflation, interest rates, and exchange rates settle at levels which will enable efficient industries to trade profitably on international markets, he says. During the last financial year severe competition in most of the company’s markets held selling prices below the increase in material costs and other costs, causing a lower growth in trading profits. The total group net profit fell 55.1 per cent to $15,273,000 in the year to

September 30, compared with the previous corresponding period. However, included in the previous result was extraordinary earnings of $19,341,000 arising from the changes in the group’s business, including selling 49 per cent of the animal health business of ICI Tasman, Ltd.

There were no extraordinary items in the latest year, so the company’s trading profits were ahead 18.7 per cent to $17,606,000. Minority interests took $1,483,000 more at $2,581,000 and equity earnings fell 73 per cent to $248,000. External sales increased 16.6 per cent to $288,797,000. The tax provision rose $791,000 to $10,124,000 and $720,000 more for depreciation at $4,390,000.

A recommended final dividend of 9c a share gives an annual rate of 16c per 50c ordinary share, compared with 22c per 100 c share in the previous period. Included in the previous dividend was a special 4c a share dividend for the group’s fiftieth year. The

dividend requirement is $6,734,000 and it is covered 2.3 times by the profit Shareholders’ funds improved $8,383,000 to $114,285,000, including ordinary capital up $3,506,915 to $21,403,000 after a’ one-for-five bonus issue in July. Working capital rose $4,871,000 to $82,437,000 and the current ratio firmed from 2.1 to 2.3 to one.