Feltex increase and 9c div.

Press, 3 September 1986, Page 32

Feltex increase and 9c div.

PA Wellington Feltex NZ, Ltd, Has lifted its profit before extraordinaries by 63.4 per cent to $47,318,000 ($28,957,000 last year) for the year ended June 30. A dividend of 9c a share would be recommended, the chairman of Feltex, Mr Lloyd Brown, said in a statement to the Stock Exchange. Sales increased by 8 per cent from $574 million to $623 million, giving an operating profit of $42,581,000 ($34,764,000).

There were tax credits Of $4,389,000 ($3,146,000 paid) and minority interests of $348,000 were added ($2,661,000 deducted). Extraordinary items of $2,354,000 ($2,192,000) boosted the profit to $49,672,000 ($26,765,000). Property revaluations of $7,223,000 ($3,520,000) took the bottom line profit to ' $56,895,000 ($30,285,000). The 1985 figures had been restated to allow comparison with the 1986 method of accounting for

property revaluations as outlined, Mr Brown said. Two significant changes of accounting policy were made in the year under review, both of which had introduced further conservatism into the results. In line with the new accounting standard, property revaluations from Aurora Group, Ltd, had been removed from the profits before and after tax and instead were shown following the profit after extraordinary items, Mr Brown said. Smith and Brown now accounted for all costs of interest-free promotions in the month concerned rather than spreading the interest costs forward over the interest-free period.

This change involved a one time accounting charge which reduced Smith and Brown’s profit before tax by more than $400,000. The previously announced sale of development properties to Aurora Group, Ltd, took place after the end of the year and therefore the profit on this transaction was

not included in the 1986 results.

Mr Brown said the year was a difficult one for New Zealand manufacturing operations where large cost increases, especially labour costs, eroded profits. This was particularly so for those operations involved in exporting and, with the strength of the New Zealand dollar in relation to the Australian dollar, export sales fell by 9 per cent after many years of strong growth. However, the combination of acquisitions, new investments and the eliminatipn of loss areas by restructuring, sale or closure continues to strengthen the base of the company and to build the foundation for further growth of profits. Mr Brown said subject to shareholders’ approval shareholders would be given the option of receiving bonus shares in lieu of the dividend. The dividend would be paid on November 18. The annual meeting would be held in Auckland on November 17.