Firestone boosts profit by 20%

Press, 20 November 1987, Page 23

Firestone boosts profit by 20%

Firestone N.Z. Ltd, shareholders will receive a final total dividend for the October year to 40.5 cps, well ahead of the previous year’s 17cps. The directors yesterday announced a final dividend of 15cps after reporting a 20.6 per cent lift in tax-paid earnings to $5,424,000 ($4,495,000).

They said Firestone’s cash flow from trading remained strong and capital expenditure was restricted, permitting the dividend lift.

Productivity gains and increased output helped produce the profit rise, the directors said. New Zealand’s strong exchange rate also weak-

ened costs on the company’s raw material, more than 90 per cent of which are imported, but overall production costs still rose 8.5 per cent, they added. Firestone’s production was ahead 37 per cent. But the return on domestic sales was subject to strong pricing pressures and export receipts were also down, both because of the exchange rate. The unaudited, preliminary profit statement showed turnover was up just 2.7 per cent to $112,530,000 (slo9,B2l,ooo).Profit on that was up 24 per cent to $9,853,000 ($7,905,000), before tax of $4,429,000 ($3,410,000). While extraordinary

gains in the previous year were $1,349,000, there were none in the latest period. That meant the final result was 7 per cent lower than the previous year ($5,844,000).

Commenting on capital expenditure, the directors said this was restricted while decisions were waited on relating to new tariff levels on imported tyres and vehicles. The Government had indicated decisions on these would be made by the end of 1987, the directors said.

The final dividend will be paid on December 21, with books closing on December 11. None of the payout will be tax free.