Chase expects to match profit

Press, 2 December 1987, Page 42

Chase expects to match profit

PA Auckland Chase Corporation expected to match its annualised profit of $lO6 million earned in the last year, said the company’s investment executive, Mr Andrew Donaldson. However, this forecast could be affected If the world sharemarket continued to decline.

Chase earned $133.8 million in the 15 months to June 30.

The Chase share price, which traded as high as 845 c in 1986, has been one of the

hardest hit by the recent crash, trading yesterday as low as 85c before recovering to close at 101 c. News that senior Chase executives had applied to the Commerce Commission for permission to renew approval to acquire 100 per cent of the company were described by Mr Donaldson as preparatory moves in case the share price continued to drop.

The move did not mean the executives intended to make a bid at present, he said. Yesterday’s closing price values Chase at about $3OO millioti-less than the value of

its issued share capital and share premium reserve. Mr Donaldson said Chase, a company which controls more than $3 billion in assets, was suffering from the perception in the market place that it was overexposed to the New Zealand property market and its profits were earned largely from share dealing and property transactions.

Investors were discounting the value of Chase’s holdings in Amalgamated Theatres, Farmers Trading Company, and Hanimex Corporation. Chase had a present

proprietorship ratio of about 35 per cent, said Mr Donaldson, and was moving towards a high liquidity position. The company had sold $2OO million worth of New Zealand property in the last eight months.

Chase was also aiming to realise non-strategic assets and assets that did not meet Chase’s cash flow requirements.

The directors have adopted a policy of not entering into new commitments until the world financial situation in the areas in which Chase traded settled down.