LWR is confident despite profit cut

Press, 3 September 1986, Page 31

LWR is confident despite profit cut

The Christchurch-based clothing manufacturer, Lane Walker Rudkin Industries, Ltd, yesterday announced a tax-paid and equity-accounted trading Profit 30 per cent lower at 4,534,000 ($6,510,000 last year) for the year ended June 30.

Sales, including six months of the Bing Harris Group, were up 16 per cent to $154,607,000 ($133,330,000).

LWR said in a statement that its domestically based companies, which were wholly owned for the full year, increased their pre-tax profits by some 23 per cent. But the combined results of exports and overseas activities, with those of M. O’Brien and Company, Ltd, resulted in a group pre-tax profit of only $1,367,000 ($4,710,000).

Provision has been made for a tax credit of $1,834,000 ($2,276,000), but the company said the future tax benefits of losses now available were not included.

Minority interests added $1,173,000 (took $103,000) and share of associated companies profits added $160,000 (took $373,000). Extraordinary losses were $312,000 ($369,000 gains).

Property revaluations also not included in the profit are $2,313,797.

Final dividend is 5c a share, with shares in lieu of dividend if chosen.

LWR said that although the full year’s profit was a substantial improvement on the first half figure of $1,421,000 it was disappointing given the satisfactory results of most domestic operations. The Bing Harris Group did not make a profit contribution in the year under review, but was anticipated to make a "useful addition” in the current year. Export sales were

$28,480,000 ($27,551,000). Most of the second half’s sales in Australia were achieved without exporting from New Zealand. Following the Bing Harris and O’Brien acquisitions the Lane Walker Rudkin companies had reorganised into five major trading groups — textiles, outerwear, underwear, sportswear and international.

All groups were forecasting improved trading in the current year and the current level of forward orders should allow this, LWR said. But because of exchange volatility and internal inflation, consid-

erable uncertainty remained about the direction and profit prospects of LWR’s export operations. Liquidity and debt equity ratios were both satisfactory and the company’s capital investment programme was continuing in anticipation of a profit improvement this year. The dividend cover on the total annual dividend of 9c a share was low, but, against the prospects of improving results, the directors recommended maintenance of the dividend at last year’s level.