Salmond SB ‘much leaner’ after merger

Press, 24 June 1986, Page 23

Salmond SB ‘much leaner’ after merger

Salmond Smith Biolab was a much leaner organisation as a result of the merger, and as part of the reorganisation, under-util-ised and surplus assets had been identified and were being disposed of, said Mr J. D. 0. Ellis, chairman of Salmond Smith Biolab, Ltd, in releasing the results of the two merged companies for the March 31 financial year. Smith Biolab, Ltd, increased net tax-paid profit to $2.7 million, up 25 per cent on the previous year. Salmond Industries, Ltd, had a profit of $2.1 million, down 25 per cent on the $2.8 million of 1984-85. Both profit results are unaudited. Mr Ellis said Smith Biolab had increased its turnover 21 per cent to $40.6 million during the year and experienced buoyant consumer product sales, including export successes in Australia. Export sales were $2.9 million, up 50 per cent. Taxation paid was $1.9 million ($1.4 million the previous year).

Salmond’s earnings had been achieved on sales of $59.6 million which were up 17 per cent on the previous year. Exports accounted for $15.3 million, up 15 per cent. Taxation paid was $1,026,000 ($868,000 the previous year). Mr Ellis said a profit dip for Salmond was predicted at last year’s annual meeting when the chairman, Mr G. W. Salmond, told shareholders the company expected its interest bill to increase. In the event, the figure was up by $425,000, but more important was the effect of the high value of the New Zealand dollar. “The appreciation of the New Zealand dollar severely affected returns on exports, particularly in the last quarter, as it did with many other New Zealand exporters.” Smith Biolab’s operations in 1985-86 continued the strong growth pattern of the last five years, and prospects were excellent. All head office functions were now centralised in Auckland, and the company had been

restructured into four groups — professional products, involving all the health and science categories; consumer products, mainly in the health care field; plastics and brushware; and food processing. “Sales in the present financial year in all operations are buoyant and we are confident the benefits of the merger will rapidly become apparent, especially so if there is a long overdue improvement in the country’s economic conditions,” Mr Ellis said. He emphasised that because of the merger, neither Smith Biolab nor Salmond Industries had been obliged to report on their year’s results, but had done so because the new company wished to inform shareholders, staff, and the financial community. No final dividends were payable, as second interim dividends in lieu of final dividends were paid on April 1. The first annual general meeting of Salmond Smith Biolab will be held on September 2.