S. and T. interim profit drops 70.5%

Press, 8 December 1987, Page 29

S. and T. interim profit drops 70.5%

PA Wellington Steel and Tube Holdings total profit dropped 70.5 per cent in the company’s latest half-year, and no interim dividend is proposed. The profit was $2,469,000 in the six months to September 30, but the disappointing result came as no surprise, the directors said. “The current financial and economic climate both in New Zealand arid overseas is such that the outlook for the remaining months of the year is for no improvement in the trading results.” A significant loss was sustained by NZMC, be-

cause of inadequate sales, low margins, and the high costs of carrying excessive stocks, the directors said. Only the metals merchandising activities produced a satisfactory result. Several restructuring moves had affected the result, they said. The company had shut its steel fabricating activities in Auckland and intended to close its vehicle assembly operations in the North Island. Staff numbers had been reduced and the levels of stock and working capital were under review. Sales of non-strategic assets were continuing. Since balance date the

group has sold its shareholding in Pacific Steel and its Manners Plaza building in Wellington. Both transactions were for cash and produced significant capital profits, they said. Turnover fell 5.7% to $352,857,000 and the preprofit tax plummeted 67.2% to $4,754,000. Tax took $1,662,000 less at $2,498,000, leaving the group net profit down 78% to $2,256,000. Minority interests added $121,000 ($390,000 taken previously), and equity profits added $92,000 against a share of losses last year of $1,605,000. There were no extraordinary items in either period.