Ariadne has 447% increase in profit

Press, 2 September 1986, Page 28

Ariadne has 447% increase in profit

Ariadne Australia, Ltd, has announced a 447 per cent increase in audited group net after-tax profit to $Au5t54,968,000 for the year ended June 30, 1986. Directors of the major Australian and international industrial group also announced a one-for-six bonus issue —■ the fourth to shareholders in two years — and a one-for-four rights issue.

Turnover increased to $982,180,000 from $42,845,000. The profit result was achieved after allowing for income tax credit of $4,791,000 (1985: expense of $50,000), interest of $55,066,000 ($3,938,243) and depreciation of $34,121,000 ($393,000). The group’s policy of at least maintaining dividend on enlarged capital was continued with the declaration of a final dividend of 4c a share to be paid on November 21, 1986.

Total payout for the year being 7.5 c (15 per cent) per share, increased to $17,265,000 ($4,858,000). Directors emphasised that this policy would apply to the proposed increase in shares on issue, and that these shares would participate in dividends from earnings generated after July 1, 1986. Earnings per share rose from 10c to 18.6 c on the increased capital. Adriadne’s chairman, Mr Bruce Judge, said the year’s results reflected the growth of the company in Australia, coupled with the decision to expand the group offshore because of the apparent weakening of the Australian dollar.

He said the group’s major international operations, Impala Pacific Corporation and Renouf Corporation, Ltd, would increase their investment programmes and this was

expected to provide positive benefits to Ariadne’s future earnings.

“Shareholders can confidently expect the group turnover generated offshore, as a result of these endeavours, to reach $1 billion during the next 12 months.

“The strategic nature of investments made by Impala Pacific during the year, was highlighted by the post balance sale of its Hong Kong property development joint venture —. Scilla Ltd — for a profit of SHK24O million. “In addition, the group’s U.S. investments, MidAmerican Telephone Corporation, Energy and Environmental Research Company and KDI Corporation, are poised to significantly increase earnings in the coming year.

“The major move into the New Zealand market, which coincided with an Australian/New Zealand exchange rate heavily in favour of the Australian dollar, made a key contribution to group earnings. “During the year we rationalised R. and W. Hellaby, acquired Repco New Zealand, and merged with Renouf Corporation, now the group’s New Zealand investment vehicle,” Mr Judge said. “Repco has now been successfully consolidated as the future industrial base of Ariadne’s Australian operations.

“This rationalisation of Repco’s manufacturing activities has been achieved without loss of employment because the manufacturing units affected have been sold as going concerns, thereby providing continuity of employment,” he said. “The operations of Repco have now been repositioned and concentrated in the distribution, service and marketing

areas of the economy where the company will have a high degree of natural protection from competition from low cost producers in developing countries, or from highly sophisticated, highly developed countries such as Japan. “Opportunities for Repco to expand into new areas of business are being actively pursued with initial priority being focused on a newly acquired furniture and equipment business with strong growth and earnings potential. Other acquisitions into businesses having well established market positions and superior consumer image and appeal £re expected during the next 6 to 12 months.

Mr Judge said: “A fully integrated property development and investment division was achieved during 1985-86, highlighted by the purhase of 50 per cent of the Ray White Group, Australia’s second largest property agency. 1

“This investment was made partly in recognition of Ariadne’s position as a large-scale end-user of property, and the need to broaden and strengthen its property operations, so that future profits generated by ‘in-house’ demand can be retained within the group.” Mr Judge said that while the group had enjoyed an unprecedented period of growth in 198586, there was every indication that expansion of a similar degree could be expected in the current year.

He said a strong operational base and management structure which had been consolidated in Australia and overseas, would enable the company’s profit growth to be at least maintained for the current year.