ASTEC is determined

Press, 29 April 1987, Page 45

ASTEC is determined

ASEA Tolley Electric Company, Ltd, (ASTEC) was back in tbe market as a reliable supplier, said the new managing director, Mr 0. G. Stoltz, in the annual report. The move to the new factory at Henderson by the switchgear division had caused long delays and high delivery costs in the low voltage business. The company incurred a substantial loss in spite of a good performance in other areas of its business. Measures taken late in 1986 would continue this year, with the aim of restoring the company’s reputation as a reliable deliverer. Measures taken so far included:

• Closing the Auckland head office and moving it

to Henderson to reduce costs.

• Splitting the switchgear business into two divisions, reducing staff numbers.

• Selling the small transformer winding plant

• Creating a new executive management team.

However, the low voltage switchgear division would not be in profit this year because of high redundancy payments and a backlash from the 1986 backlog of orders. "However, increasing forward orders confirm regained customer confidence, and we are convinced profitability will be finally restored in 1988,” he said.

ASTEC now had the

objective of at least breaking even this year, although it was not helped by high interest rates. ASTEC incurred a total loss of $4,269,000 in the year to November 30, compared with a profit of $9,396,000 in the previous corresponding period.

Total sales rose 32.2 per cent to $83.3 million, but high costs related to moving of the switchgear business produced a pre-tax trading loss of $3,546,000 ($5,872,000 profit). Tax took $2,463,000 less at $267,000, but depreciation

rose $588,000 to $1,499,000.

There was an extraordinary profit of $190,000 ($672,000 loss).

The annual dividend rate has been cut to 5c a share from 20c a share (20 per cent), after no final dividend was recommended.

Shareholders’ funds fell $4,060,000 to $14,297,000, including steady ordinary capital of $8,086,000. Working capital increased $2,664,000 to $14,258,000 and the current ratio firmed from 1.4 to 1.5 to one.