Clearwood loss causes review

Press, 1 December 1987, Page 50

Clearwood loss causes review

PA Wellington The directors of Clearwood Thoroughbred Stud are reviewing the company’s activities after re- ? orting a loss of 4,549,000 in the 16 months to July 31. This compares with a loss of $758,000 In the previous corresponding period. The loss was caused by a combination of high holding costs of stud properties, low profit margins on stud activities, and high overheads, the directors told the Stock Exchange. No statement was made on the payment of a dividend. Extraordinary losses of $689,000 ($209,000 previously) and a taxation refund of $BB,OOO (nil) give a total profit of $5,150,000 ($967,000). Turnover fell 35.9 per cent to $2,136,000. The company changed its balance date to reflect seasonal influences on the bloodstock industry and changed its valuing of bloodstock to the lower of cost on net realisable value. Previously bloodstock were recorded based upon valuation.

In August, .1986, Clearwood bought the assets

and share capital of the Matamata-based Field House Stud and Field House Stud Partnership. The consolidated accounts for Clearwood Thoroughbred Stud reflect a full year’s trading results from this business.

In April, 1987, the company bought the assets of Ashley Heath, Warren Hill, and Fitzroy House, at Newmarket, England, consisting of a stud and training facilities. The extraordinary losses came from the sale of Clearwood’s investment in Foxbridge properties in July, 1986, at a cost of $304,000, plus advances to deemed to be uncollectible of $385,000, directors said.

Taxation was not provided for in the loss although a taxation credit of $BB,OOO has been derived from export-re-lated activities. Accumulated losses at July 31 amount to $7,323,000 ($967,000) after a prior period adjustment arising from a change in the method of valuing bloodstock ($783,000) and write-off of goodwill ($1,989,000) relating to the acquisition of Field House Stud Partnership.