Newmans’ share crash bill S7M

Press, 24 February 1988, Page 37

Newmans’ share crash bill S7M

Newmans Group share investments plunged §7,249,000 in value between the beginning of October and December 31, a reconstructed bal-ance-sheet with the halfyearly result shows. The balance sheet is required by the Stock Exchange. The directors say the position reflects the position if shares had been written down to their value at December 31. The investments include Ceres Pacific, now 31 per cent-owned. The group half-year trading profit to December 31 was $1,618,000, down from $1,932,000 in the last half of 1986. An extraordinary profit of $6,094,000 (compared with $4,373,000) lifts the tax-paid profit after extraordinary items to $7,712,000 ($6,305,000). The company does not disclose the source of its extraordinary items, but this year’s includes profit from the sale of L and M Mining. The directors have declared an unchanged interim dividend of 5c a share (10 per cent) payable on June 3. Turnover was down to $86,836,000 from $149,581,000 and beforetax profit fell to $1,260,000 from $3,333,000. There was no provision for tax in either period. Minority interests took $57,000 against $941,000

last year. The share of associated companies retained profits was $415,000, compared with a loss of $460,000 the previous corresponding period, leaving after-tax operating profit at $1,168,000 ($1,932,000).

Included in the results is the Newmans’ share of 22.5 per cent in Ansett New Zealand from start up in July, 1987, to December 31. On Monday the Government announced moves to allow Ansett Australia to increase its share of Ansett New Zealand to 100 per cent to enable the air line to continue its growth as a domestic competitor to Air New Zealand. “Newmans’ objective in initially floating Newmans Air, was to provide an alternative to the monopoly created when Air New Zealand took control of Mount Cook Group,” said the chairman, Mr Grayburn. “This has been achieved, albeit at considerable cost, but the benefits are being felt, not only in our activities but in the tourist and travel industry as a whole.” The present results reflected some recovery of the tourist trading sector in a traditional period of low activity. The result included Atlantic and Pacific Travel for the first time. Last year’s figures included the mineral and freighting divisions, which have

since been sold. Newmans’ policy of overseas investment had resulted in good growth in our Australian business and in marketing in North American and Japan, he said.

“For the first time in recent years, tourist visitor numbers to New Zealand have begun to decline. This is partly because the high value of the New Zealand dollar, which makes New Zealand an expensive holiday destination, and also to the outstanding attractions in Australia this year.”

The second six months will see New Zealand competing against this year’s outstanding attractions in Australia, but Newmans was well placed with its liquidity to strengthen its dominant position within the South Pacific region, he added. In forest-based activity, the MDF Plant was now producing at full capacity and was near break-even, with positive cash flow. Horticultural and export activities continued to produce a steady return. “In view of the Government’s stated intention to introduce a full dividend imputation scheme, shareholders are advised that the share premium reserve account stands at S3SM, most of which is represented by cash premiums and thus available for future dividends free of tax in the hands of shareholders.”