SCM bonus after fine result

Press, 23 July 1987, Page 25

SCM bonus after fine result

Smiths City Market Group, Ltd, fully lived up to high expectations and exceeded a tough budget for the year ended April 30.

The directors celebrated by proposing a one-for-10 bonus issue — the third in as many years — after reporting a 40.9 per cent increase in unaudited tax-paid profit to $6,452,000.

The result was achieved on a turnover of $199.0 million (up 41.7 per cent). The provision for taxation, at $4,011,000, was 29.7 per cent higher. An independently assessed net increase in the value of properties, of $4,267,000 for the year, has been credited to a property revaluation reserve, and is not included in the profit.

In their review, the directors said that against the usual trend, the group’s highest sales were achieved in the first half — because of pre-GST spending.

“Just as the level of sales and profit in the first half far exceeded expectations, correspondingly the second half results were less than originally anticipated,” the directors said.

“However, the combined result for the full year ended up being just ahead of our originally budgeted profit figure. “Trading at present is particularly challenging, and while we will continue to strive to maintain our established growth rate for the full financial year, it will clearly not be possible for us to do so In the current first half.” The directors warned that any comparison with last year’s pre-GST boom would be misleading. They said that, bearing in mind the present recession, Smiths would continue to investigate the increasing opportunities for expansion by way of merger with established businesses. “At the same time we

are also vigorously pursuing our own programme of new store openings and refurbishment of existing outlets.”

Last year Smiths City gained access to the North Island through a SI4M take-over of Irvin and Stem Holdings, Ltd, an Auckland-based retailer.

The directors are recommending a final dividend of 10.5 per cent on ordinary shares, with 5 per cent payable in cash and the balance through the company’s share issue plan. Shareholders may elect to take a cash dividend in lieu of ordinary shares.

The partial cash dividend payment is required to maintain the company’s trustee security investment status. Total dividend for the year is unchanged at 18 per cent The bonus issue will also apply to specified preference shareholders, but will not be issued until October 31.