Brother Dist confident

Press, 24 July 1986, Page 28

Brother Dist confident

The directors of Brother Distributors, Ltd, are confident that the company will return to profitable trading this year, the retiring chairman, Mr A. R. Guthrie, says in his review with the annual accounts for the year ended March 31. Large contracts anticipated last year have materialised this year, Mr Guthrie says. The almostcompleted three-year restructuring plan has meant the centralisation of products and parts into a new warehouse in Auckland which has produced immediate overhead savings.

A large increase in advertising over the previous year — a “reflection of the directors’ desire to establish a sound brand name” — was accounted for in total during the financial period. This will have continued and long-

term future benefit, Mr Guthrie says.

As previously reported, the board has declared a one-for-10 bonus issue and “this can be seen as a measure of the directors’ confidence in the future.”

During the final six months of the year under review the company experienced very difficult retailing conditions, brought about by a general tightening in the New Zealand economy. Coupled with the marked strengthening of the Japanese yen and its effect.on landed costs this contributed significantly to the loss for the year, Mr Guthrie says. As reported, the loss was $280,358 (last year,

$304,531 profit) from an 8 per cent higher turnover of $10.3 million, and the directors are recommending that the final dividend

be passed. As wide-scale changes, in preparation for growth, were implemented, the company experienced one of the most difficult years in its history, the managing director, Mr G. B. Walshe, says in his report During the year a number of new products were introduced by the business machines division, and this division enjoyed higher percentage sales increases than other Brother divisions. The company has now reached No. 2 position in this market, Mr Walshe says.

Sewing machine unit sales were disappointing, but the market share has been maintained. This

division was most affected by the economic downturn.

Sales in the industrial division (automatic equipment to the clothing industry) continue to improve, and Mr Walshe says that the company has the biggest market share in the large sophisticated equipment field. However, the company is experiencing heavier competition in the lower and basic industrial sewing machines. An attempt was made during the year to treat engineering support services as a profit centre rather than a cost centre, but this failed, Mr Walshe says, although management will continue Its efforts.