Magnum doubles profit

Press, 22 August 1987, Page 26

Magnum doubles profit

Magnum Corporation, formerly Rothmans Industries, doubled profit before extraordinaries in the year ended June 30.

This year’s unaudited preliminary group profit ater tax is $42,714,000, up from $21,155,000. The comparative figures for the previous year do not include Dominion Breweries or Quill Humphreys. Extraordinary profits of $101,912,000 (previous year, $3,842,000) lifted the final result to $144,626,000, compared with last year’s $24,997,000. These profits arose primarily from the disposal of the tobacco business, from the Quality Inns group sale, and from the disposal of various assets.

Significant extraordinary profits will be a feature of the group’s future results as rationalisation of the assets of the enlarged group continues, the directors

Turnover was $1,029,007,000 (1985-86, $665,645,000). Profit before tax was $65,199,000 ($36,622,000). The after-tax trading profit of $42.7M ($21.1M last year) includes the trading results of Dominion Breweries for the 12 months ended June 30.

The directors say profitability for the full year was adversely affected by lower-than-expected contributions from DB and Quills. "However, the price increases which took effect near year end, coupled with the efficiencies being implemented. will enable DB to

achieve a more satisfactory profit performance in the current year.” The directors say the slowdown in consumer spending which became evident early in 1987 has continued with little prospect of an early recovery to the spending levels of 1986. However, the group is now well placed to benefit from the major consolidation that has been effected in the last six months. A final dividend on ordinary shares of 8.5 c a share (17%) will be recommended. This will make a total of 42% (21c a share) for the year, including the special interim

of 10% (sc) in November. Excluding that special payment, the annual dividend rate is now 32% (16c a share) on the expanded capital.

The bonus shares in lieu of dividends scheme will apply in full to the intended final dividend. The bonus shares entitlement for participating shares will be calculated on a notional share value of 573.

The final dividend for the 1986-87 year does not apply to the new ordinary shares issued on June 30, on redemption of the company’s specified preference shares.