Baker Group looks to high liquidity

Press, 8 July 1986, Page 29

Baker Group looks to high liquidity

PA Wellington The property developer and investment company, Baker Group Corporation, Ltd, expected a high level of liquidity this financial year and increased earnings, the chairman, Mr John Baker, said in the annual report. He said the group had a satisfactory level of unused credit lines and these were being constantly increased.

“Funds are available to finance all development projects due to commence this year, and development activities are expected to show a substantial cash surplus,” he said. The downturn in property development forecast in last year’s annual report did not materially affected the company’s trading in the year ended March 31. “This downturn is expected to continue during the financial year, but the

group is well placed with negligible unleased space. “The group is not expected to retain as many of its developments during the coming year as previously.

“This will result in a high level of liquidity, thus enabling the group to take advantage of future opportunities. “All companies in the group are trading well and the group’s profit is expected to be ahead of last year’s earnings.” As reported, Baker Group’s tax-paid profit for the year under review was 77 per cent higher at $4,213,844, with revaluations on investment properties adding a further $847,856.

Investment properties were valued at $26.5 million, an increase of $16.8 million over the previous year. The group had departed from the Society of Ac-

countants’ Statements of Standard Accounting Practice by including developing profit as part of operating profit and through non-disclosure of turnover.

Auditors, Coopers and Lybrand, said they concurred with the group’s policies adopted. Where a property was developed in the current year and retained within the group, a development margin was recognised when the development had been completed and leased, the directors said in notes to the accounts.

They said inclusion of “actively generated” development profits in operating profit was necessary to give proper understanding of the group’s results.

The group’s annual meeting on July 30 in Auckland will be asked to authorise issuing up to 2.5 million ordinary shares