Feltex Int. up 7.2% to $37M

Press, 9 March 1988, Page 38

Feltex Int. up 7.2% to $37M

Feltex International’s total profit rose 7.2 per cent to $37 million in the six months ended December 31, compared with the previous corresponding period.

The latest result included realised property gains of SIO.BM ($7.4M previously). The directors said yesterday that without the profit contributions from companies in North America . and Australia, Feltex would have had a significant fall in profits compared with previous years.

The strong New Zealand dollar prevented the overseas investments contributing more to New Zealand shareholders. Feltex had reason to be confident about the remainder of the year because of the expected results from Monier being added to the overseas investments already held, they said.

Feltex would receive income in the second half of the year for managing Monier for Equiticorp Tasman.

Feltex’s managing

director, Mr | say, said tha pany had a r contract with'

John Lindit the comnanagement Equiticorp

Tasman to manage Monier.

Subject to the necessary investment and i shareholders’ consents, I it was the intention |of Feltex to buy Monier, 100 per centowned by Equiticorp Tasman. i

The directors said that two-thirds of the company sales had ;come from North America and Australia. Considering the problems in j the world’s economy and New Zealand manufacturing the latest result |was considered excellent. The result | showed Feltex’s “underlying strength,” and the increasing profits from making and selling tangible products! The policy of balancing businesses in different countries and currencies was also successful, they said.

“Even now the full benefits of i this transnational approach are not being fully reflected in the company.’s results.”

In New Zealand, business suffered severely because of the economy. Demand from consumers was down, there was serious industrial disruption (including the company’s longest strike), and there was increasing pressure on export profits. The profit was achieved on turnover up 14.3 per cent to $403.5M, and after expenses, the pre-tax profit was ahead 14.5 per cent to 541.7 M. Taxation took $2.9M more at $4.7M, and minority interests $lOO,OOO (nil). There were no extraordinary items in either period.

A steady interim dividend of 7c a share (14 per cent) has been declared, payable on April 5. At December 31, shareholders’ funds were up $106.7M to 5564.6 M, and working capital improved $96.5M to $240.8M, giving a current ratio of 2.1 to one (1.9). The earnings on average ordinary shares eased slightly from 25c to 24c, and the net asset backing (undiluted) rose from 308 c to 338 c.