Paynter to expand further

Press, 29 January 1988, Page 20

Paynter to expand further

The first move of Paynter Corporation will be the acquisition of a timber company in Australia, the chairman, Mr Richmond Paynter, told a well-attended annual general meeting in Christchurch yesterday. The move would fit the group’s strategy of running Paynter International on parallel lines to Paynter Corporation, he said, and a detailed announcement was expected in a week or two. The group is confident of another solid performance in the current year, after a profit of $9.6 million — well ahead of budget and double the previous year’s — for the latest year ended October 6. “We look forward to the next 12 months with a feeling of cautious optimism, but with the confidence of producing another solid year’s performance,” Mr Paynter said. "We will be making the most of all our opportunities while at the same time listening for any warning bells on the horizon. After trading successfully for 75 years, we are not about to start taking uncalculated risks now. We believe that shareholders who continue to support the company will be rewarded in the medium term.”

Mr Paynter said that he believed’ that the strategies put in place would protect the group from the worst of the ravages of the sharemarket. “For one, we have no exposure to equity investment in public companies. Secondly, our core business activity has actually continued at an increased level in the last three months. “We have in place a decentralised corporate structure, and a broad base of property development, construction, and timber operations which are spread across two economies: New Zealand and Australia. As a result the impact of economic fluctuations within particular business sectors are minimised. For example the development of New Zealand retirement villages is not linked to the commercial office market in Christchurch. Neither is the Sydney property market linked in any way to the New Zealand market for finished timber products. “We are aware of the growing swell of opinion that the commercial property market is about to contract, however, in the area of property development, our company is not solely involved in office developments. In the Christchurch commercial

property market we have taken a cautious, low risk approach, ensuring that there is tenant demand for the new office space we are about to develop before any construction takes place. By matching risk to market demand, by pre-letting and preselling our developments, as we have done with our latest major projects, and by concentrating on location and quality, our exposure to any risks is minimal,” Mr Paynter said. “We have a strong presence in the Sydney property market through our shareholding in Condux Corporation. There are positive signs of rental growth in all Sydney office sectors, with demand for space outstripping supply. Lack of available commercial and industrial space within the prime downtown Sydney area has focused increasing attention on alternative locations, so that Sydney’s fringe and regional centres are also benefiting from this resurgence in the property market. Having just returned from a board meeting yesterday (Wednesday), indicators for 1988 are still positive, with forward work load projections for Condux Corporation strong. “Our development ac-

tivity is also spread to retirement villages. Since our first Bishopspark development in Christchurch five years ago, further lifecare villages in Mount Maunganui, Titirangi, and Pakuranga in Auckland, and Nelson, have been developed in association with the United Building Society, allowing us to bridge the commercial and' residential property markets. “With the average age of the population becoming older we are seeing an increasing demand for specialist support services available to this sector. Department of Statistics demographic projections indicate that by the year 2000 the absolute number of people aged over 60 years will increase by 95,000 — 51,000 of whom will be over 75 years of age. “Not so long ago the overwhelming majority of old people lived in their own houses and support systems would be provided by family members — usually daughters — however, sociological and demographic changes have now led to a rethink of the support services that are available to the elderly. “The lifecare retirement villages offer a quality, secure and dignified lifestyle for our elderly

people, where their every need can be attended to in a supportive community atmosphere. “We currently have SSOM worth of retirement villages being developed and under construction, and see a continued growth in this sector throughout New Zealand at a fairly constant rate. “Our timber sawmilling, processing and manufacturing operation has held its strong market position despite a nationwide slump in the timber sector. An aggressive response to the pressures and needs of the market has seen Paynter Timber become impressive leaders in all areas of activity. Quality, high grade products are produced for domestic and export consumption via a national marketing and distribution network, and the acquisition of J. Scott and Company has given Paynter Timber a dominant share of the imported timber market in New Zealand, importing over 40 species from Asia, the Pacific Islands, and North America. Shareholders approved the dividend of 6c a share, the 2c 75th anniversary bonus dividend, and the one-for-four bonus issue.