WilJeff turnover up, profit down

Press, 28 February 1986, Page 16

WilJeff turnover up, profit down

Although the group turnover of Williamson Jeffery, Ltd, increased 10.3 per cent to $27.5M, pre-tax profit was more than halved In the six months ended December 31, the directors announced yesterday. Pre-tax profit fell from $1,159,000 to $556,000, and .as the provision for tax was proportionately much higher — 34.7 per cent against 24.6 per cent for the same period last year — profit after tax, at $363,000, was 58.5 per cent less than last year’s corresponding $874,000.

An unchanged Interim dividend of 6c a 100 c share (last year 6c, also from retained earnings) will be paid on May 5, ex dividend April 19.

The directors said that the profit reduction was the result of greater competition in the domestic market and loss of export earnings because of the strength of the dollar for most of the period. Pre-tax profit was also adversely affected by significantly higher interest rates incurred in servicing a similar level of working capital and when debt compared with the corresponding period last year, they said.

It also suffered from a substantial non-recurring expense arising from the relocation in October of all the company’s wholesale distribution operations in the Auckland region.

These factors, “together with a reduction in the rate of export tax incentive on a substantially lower level of export sales, have all contributed to the lower tax-paid profit now reported,” they said.

“Group turnover for the last half is expected to remain at similar levels to the first half, with market competition remaining keen. Interest rates are not expected to reduce during the remainder of the financial year, and this, together with other cost increases, particularly salaries and wages, will impact further on profit margins — resulting in this year’s profit being . less than that earned last year,” the directors said.