Mair Astley posts record pre-tax gain

Press, 23 September 1988, Page 16

Mair Astley posts record pre-tax gain

By

MARK REYNOLDS

Mair Astley Holdings, of Christchurch, has reported a record pretax profit of $12.07 million for the year ended June 30, up 1.6 per cent on the previous corresponding period. However, a higher tax bill of $3,454 million ($365,000) and an extraordinary write-down on its investment in Skeggs Corporation dragged the total profit down 48.6 per cent to $5,895,000 ($11.5M previously). The result was on turnover which increased 4.2 per cent to $559M ($536M). Minority interests were a loss of $130,000, compared with last year’s gain of $249,000. The company has not declared a final dividend as it has already declared two interim dividends of 7.5 c a share, maintaining a total 15c (30 per cent) for the year. The managing director of the primary products trading and manufacturing company, Mr Alan Shadwell, said Mair’s commodity

trading and processing operations performed well, but the New Zealand dollar’s volatility put extreme pressure on manufacturing activities.

Mair’s main New Zealand manufacturing businesses are Christchurch Carpet Yarns and E. Astley and Sons, an Auckland tannery. The two companies relied on exports, predominantly to Australia, and this was causing concern because of competition from Australian manufacturers, Mr Shadwell said.

The fixed costs in manufacturing and the volatility between the New Zealand and Australian currencies were also cutting profitability. To improve returns, Mair, was moving some of its activities overseas and acquiring manufacturing units in Australia. Earlier this year the company expanded its interest in the storage and sales of tallow through the purchase of Craig Mostyn, Australia, he said.

The purchase made Mair one of the largest tannery groups in Aus-

tralia and New Zealand, Mr Shadwell said yesterday, and the company would be < moving other activities overseas. “If we can’t get a satisfactory return here, we have got to do it.” At present, Mair has about 6 per cent of its investments overseas but Mr Shadwell said this would increase if the New Zealand currency remained volatile. Although Mair had recently expanded its treasury operations it could not always hedge against currency fluctuations. The treasury expansion occurred when Mair ceased its futures trading business last week. The staff from the futures company were transferred to Mair’s own financial management sectors. Regarding the writedown in its Skeggs shareholding, Mr Shadwell said Mair had revalued the stake to the take-over offer by Wilson Neill. The offer was two Wilson Neill shares for every three Skeggs shares, plus 11c cash. Mair had accepted the offer for its 5.8 M Skeggs shares. _______