Ascent facing up to its problems

Press, 10 September 1987, Page 24

Ascent facing up to its problems

In spite of the poor start for Ascent Corporation, Ltd, its directors believe that the aim stated in the prospectus has been achieved, the chairman, Sir Laurence Stevens, said in his review with the accounts for the period from October 10 to March 31.

As previously reported, Ascent Incurred a loss of $1,245,000 in the 5.5 months.

The directors believe that with the adjustment to goodwill and with the remedial action that has been taken, that the group has indeed a sound asset base, and considerable potential to develop profitability.

Sir Laurence said that the company’s difficulties stemmed largely from expanding too quickly without sufficient management strength at the centre to absorb all the business acquired. The inherent higher costs affected all the corporation's activities. "Operational improve-

meats have been made since balance date and the results for the three months to June are ahead of budget

"While the manufacturing operations are selling in a depressed domestic market the export outlook is promising and is likely to have a significant effect on the year’s result”

When the directors became aware of the problems, the company’s major shareholder, Leyland Growth, Ltd, helped with temporary financing when borrowing became difficult because the asset base was diluted.

Although this relieved the immediate pressure on liquidity. Ascent still has an unacceptably high interest bill, Sir Laurence said.

In May, Mr Nelson Tolerton was called in as temporary managing director to review the company's operations and help set Ascent back on its feet through a series of financial measures.

These included: • Selling assets (principally property) which were not contributing or essential. • Reducing current assets to efficient working levels. • Organising a formal and stable funding package. • Increasing sales. • Moderating expenditure. • Developing wider export markets. Good progress is being made, Sir Laurence said. “Operational improvements have been made since balance date and the results for the three months to June are ahead of budget While the manufacturing operations are selling in a depressed domestic market the export outlook is promising, and is likely to have a significant effect on the year’s result”

Since balance date Leyland Growth has increased its shareholding in Ascent to 41 per cent