Newmans profit cut no hurdle

Press, 29 August 1986, Page 10

Newmans profit cut no hurdle

PA Wellington Newmans Group, Ltd, directors remained confident despite their announcement yesterday of a one-third reduction in profit for the year ended June 30.

Newmans’ profit, which included extraordinary gains, fell to SlO.Ol million against $16.13 million last year. Extraordinary items came to nearly S2M (52.68 M last year). The fall was despite a substantial increase in turnover totalling 5272.83 M (5205.92 M Newmans appeared hardest hit in its share of associated companies’ retained profits, which fell to 5381.000 compared with 52.48 M. Another factor was the loss of $323,000 ($97,000 loss) from minority interests. The directors recommended a 6.5 c a share dividend, payable on December 5.

The year was dominated by difficult trading conditions in Newmans’ tourism division, mainly as a result of the "drastic” revaluation of the New Zealand dollar against the Australian dollar, the chairman, Mr Peter Grayburn, said.

The general state of the Australian economy had caused a substantial reduction in the number of Australian tourists. Numbers of tourists from North America and Japan remained high, with Newmans’ growth rate outstripping that of the market as a whole. Despite a reduced profit contribution from tourist related activities, the company had invested heavily in tourist facilities and plant which would see it well-placed to service the forecast increase in visitor arrivals. .Newmans Coach Lines recorded an excellent result, Mr Grayburn said. The minerals division produced a steady result, although its agricultural business was affected by the decline of the rural sector. New technologies, at present being developed, and the establishment of an Austra-

lian operation, should lead to enhanced earnings from this division, Mr Graybum said. The directors were pleased with positive reactions to the recent announcements concerning the future of Newmans Air. “The take-over during the year of our competitor, Mount Cook, by Air New Zealand, caused us to completely reassess our airline strategy. “As a result, we have successfully established a joint venture with Ansett and Brierleys, which will not only secure the future of our tourist airline operation and underpin our mainstream tourist business, but will also provide main trunk travellers with the opportunity to experience similar new standards of service and efficiency.” The directors were confident that with a difficult year now behind them, the coming year would see a significant rise in earnings. The directors have invited Mr O. R. Gunn and Mr G. R. Wheeler to join the board of Newmans. They are chairman and managing director respectively of Rada Corporation, Ltd, Newmans’ new main shareholder.