Newmans div. on $6.3 million

Press, 25 February 1987, Page 33

Newmans div. on $6.3 million

The unaudited accounts of Newmans Group, Ltd, show a group profit after tax, from all sources, of $6,392,000 for the six months ended December 31 — compared with $6,106,000 for the previous period. Profit from trading was $1,932,000 (last year $4,610,000). Revenue amounted to $149.2 million. No income tax was payable. Shareholders Equity remains at 41 per cent, while the net tangible asset backing increased from 176 c to 186 c a share. An unchanged interim dividend of 5c a share has been declared, payable on June 5. “As noted by the managing director in his address to the 1986 annual general meeting, the tourism sector of the economy is undergoing significant changes,” the chairman, Mr P. W. Grayburn, said. “Although statistics indicate a continuing rise in the number of visitors to New Zealand, they disguise the fact that longstay Australians are being replaced by shorter-stay visitors from the United States and Japan, leading to a downturn in the number of visitor-days spent in New Zealand. This, together with a trend towards unstructured tours, has resulted in a reduc-

tion in earnings from Newmans tourism division. Newman’s directors believe that the adverse effects of the changes in the industry are short-term, and therefore intend to continue with the company’s investment and expansion throughout the South Pacific, one of the world’s major growth regions for the tourism industry. This is evidenced by the inclusion in the current result of more than SI.SM of additional long-term promotional expenditure in the United States and Australia. This expenditure is in addition to the more than SIOM spent each year by Newmans in its overseas offices.

The acquisition of Chester Coaches, a Syd-ney-based coach tour operator, has been announced recently, and further opportunities for expansion in Australia and elsewhere are being negotiated.

“The sale of the Minerals Division of Newmans Group to L and M Mining, Ltd, has been fully reported in the media, and Newmans looks forward to the profitable expansion and diversification of that company, in which we

will continue to be the major shareholder, Mr Grayburn says. “The medium density fibreboard plant, in which Newmans has a 35 per cent investment, has now commissioned its second stage, an added value plant, and its new thin board product has had a successful introduction into the New Zealand and Australian markets.

“The freighting, export, and coachlines divisions of the group performed reasonably well within the constraints of current economic conditions.” On the outlook for the remainder of the year, Mr Grayburn says that although current difficult trading conditions are likely to continue for the balance of the financial year, the policies being pursued by the' directors should lead to an improved profit performance.