Donaghys continues 2nd half recovery

Press, 5 September 1987, Page 27

Donaghys continues 2nd half recovery

PA Dunedin Donaghys Industries was continuing the recovery demonstrated in the second half of last year, the chairman, Mr Bob Greenslade, told the annual meeting in Dunedin. Targets for the current financial year were substantially in excess of those achieved in 1979. “At this stage we confidently expect to attain our objectives,” he said. The interim results which are normally announced in November did not give an indication of the full year’s results because of the seasonal nature of our business, he said. “Nevertheless, we expect the six months results for this year to exceed last year’s.” The company had been returned to a more profitable path, he said. Restructuring had produced leaner and more cost-efficient operations. While it was difficult to

forecast the direction of the economy the outlook for the company was positive. “There are now indications of improved farmer confidence, which will generate better trading conditions. It is encouraging to note that while many of our markets have taken a pounding Donaghys has maintained and in some cases improved its market dominance.” The company’s success reflected the board’s investment strategy, which was designed to provide real growth and profitability in the mid to long term. The chairman said the directors were disappointed at the company’s share price of 130 c. “The current price is a substantial discount on the published asset backing of 187 c a 50c share,” he said. “We appreciate that industrial companies are

not in favour with the investing public but we do employ a great number of people and we do make real money, not arbitrage profits or the like which do not create jobs or benefit the community.” The managing director, Mr Nat Craig, said it was a mistake to refer to the company as “that rope and string company.” It would be more proper to identify the group within the plastics sector. Although the cordage division still processed considerable volumes of sisal, manila flax and jute, the market was shifting to synthetic based products. For several years the company had been upgrading its rope machines and expanding synthetic yarn manufacturing capacity by the installation of high tech computer-con-trolled extrusion lines. These actions had enabled the company to achieve improved production efficiencies and develop new

products. Donaghys has just received an order to supply rigging for Japanese yachtsmen. Mr Craig said the Bengal syndicate had ordered the KZ Spectraline rigging used by the New Zealanders in Perth, for the next America’s Cup challenge and for a “maxi” yacht which will take part in the next Whitbread Round-the-World race. The Japanese yachts, sponsored by Mr Masakazo Kohayashi, would require tens of thousands of dollars worth of braids for their campaigns, Mr Craig said. “The syndicate is managed by . a Mr Tikeda, who has been sourcing our product for the Japanese market for a number of years,” he said. Mr Greenslade said the head of the New Zealand challenge in Perth, Mr Michael Fay, was generous in his commendation of the yachting braid.