IEL making cash, bonus issues

Press, 25 September 1987, Page 10

IEL making cash, bonus issues

p A Wellington • Industrial Equity has announced cash and bonus share issues after a 58 per cent jump in its tax-paid operating profit for the June year to $NZ261,173,000 ($Au5t230,116,000). For 1985-1986, lEL reported a net profit of sAust 145.27 M, and for 1984-85 the result was sAustsl.l7M. • lEL said it would make a one-for-10 cash issue at Aust4ooc a 50c share (NZSIIC) and after completion of that, a pne-for-five bonus issue. The Issues would increase the company’s issued ordinary capital from sAust29sM to about sAust39sM, it told the Stock Exchange. In a preliminary profit statement, the chairman, Mr Ron Brierley, described 198687 as “another vintage year producing a strong financial performance consistent with lEL’s objective of "genuine and uncomplicated increases in shareholder values.” ; The company will pay a final dividend of 10 per cent, making a total for the year of 20 per cent. The report shows a 34.5 per cent rise in lEL’s sales revenue to $NZ1.795 billion (SAustl.s7B billion), from JNZ1.335 billion (sAustl.l74 billion). Revenue from other sources except extraordinaries was up 282 per cent to $1,521 billion (sAustl.33B billion), from $537.9M (sAust473.BM).

The operating profit was after, tax of $14,208,000 ($Au5t12,492,000), up from $9 898,000 (sAustB,7o3,ooo), and after a reduction for minority interests of $72,672,000 ($Au5t63,894,000), compared with $37,356,000 ($A32~844,000) in the previous year. There were no extraordinary items. The bottom line compares with the previous year’s $165,230,000 ($Au5t145,271,000). The result represents earnings an ordinary share for 1986-87 of Aust4o.sc, up from Aust33.6c in the previous year. Net tangible asset backing a share has increased to Aust2o6c from Austl4lc. Mr Brierley said lEL should now be seen as a soundly based investor and industrial holding company. "supplemented by, but not dependent on, a high degree of entrepreneurial flair.” He said the company’s strategic growth prospects made it now look outside Australia, to New Zealand, Britain and the United States, for portfolio development and acquisitions complementing its existing trading operations at home. Reviewing 1986-87, Mr Brierley said lEL had intended to enlarge its stake in the media Industry through its stake in the Herald and Weekly, Times Ltd, subsequently sold for a surplus of about sAustlooM ($NZ127.75M).

“Arguably, our preferred course of a major investment supported by active involvement would have been even more. rewarding over a longer period but, in the event, the emergence of the hidden value which we had accelerated by other developments." ’ , ■ ... The company believed Advertiser Newspapers, in which it has a 20 per cent interest, remained an underrated media company in that that industry’s shake-up, Mr Brierley added. He also identified property as another lEL activity which had been developed steadily in recent years, from a base of interests in the Sydney suburbs. Property was now one of the company’s main sources of earnings. Mr Brierley said in the investment sector lEL had revived its listed subsidiary, Acmex Holdings, with which it was now making takeover offers for Union Carbide Australia and New Zealand and Waugh and Josephson Holdings. lEL plans to make its one-for-10 cash issue on October 16. The bonus issue will be made, including shares alloted in the cash issue, on December 10 and it will be made from share premium reserves and will be a tax free distribution to shareholders.

The final dividend will be paid from franked income and thus effectively tax free for many shareholders.