Corp. Investments well ahead

Press, 24 September 1988, Page 33

Corp. Investments well ahead

PA Wellington The Auckland diverse investment company, Corporate Investments, has announced a $23,634,000 profit before extraordinaries for the year ended June 30. The result is a 36.8 per cent increase over the $17.277M profit the previous year and follows a 43 per cent group interim profit to December 31. Concentration on high cash-flow businesses and record profits from the group’s three main operating divisions — Montana Wines, Corporate Equities, and Allied Finance — saw the company emerge from the sharemarket crash virtually unscathed to post the latest in a series of successful results. The group made a pre-tax profit of $17.25M on turnover of SIB9M, up 17.6 per cent on the previous year’s SI6IM. Tax of 53.025 M ($1.83M) brought the after-tax profit to $20.275M ($15.101M), while shares of associate companies’

retained profits — less tax and dividends received — contributed a further 53.359 M ($2.176M). An extraordinary deduction of $1.867M (nil the previous year), arising from an adjustment to future deferred tax benefits and liabilities, brought the bottomline profit to $21,767,000, an increase of 26 per cent over the previous result. The before-extraordinaries result represents earnings per 20c share of 27.6 c and a return on capital of 138 per cent. No final dividend was proposed. The two interim dividends announced will total 8c a share. The result follows a 152 per cent profit increase for the 1987-88 year (slightly below predicted profit) and a profit for 1986-87 that exceeded forecasts by nearly 72 per cent. The executive chairman of Corporate Investments, Mr Peter Masfen, said the wholly-owned winemaking companies

Montana and Penfolds New Zealand, Ltd, accounted for 45 per cent of all New Zealand wine sales, while exports had risen 150 per cent. The Australian-based property development company Corporate Equities, 49 per cent owned by Corporate Investments, recently reported an increase in net profit after tax for the year, to sAustlO.2s6M (from $877,000). Joint venture arrangements were completed during the year in respect of the company’s two main Sydney CBD commercial projects. The partners in each case are Japanese companies and major Australian financial institutions. Corporate Equities retains a 20 per cent equity in each development, as well as the role of project manager. Since balance date the company’s 17level all-suite Brisbane hotel, known as The Abbey, was officially opened. The wholly-owned subsidiary, Allied

Finance, and its leasing arm Motor-Fleet maintained a strong liquidity position throughout the year. As at June 30 gross finance receivables had increased 50 per cent to S4BM. Newmans became a subsidiary on June 30, and the Newmans balance sheet at June 30 has been incorporated in the Corporate Investments Group consolidated accounts, but the group’s interest in Newmans’ trading results will not be included until the 1988-89 year. Group capital funds have risen by 80 per cent from SIO3M to SIBSM while group assets have increased from S2OOM to S43BM. “Although some divisions of the group suffered from the economic downturn, their impact on the over-all group result was more than overshadowed by the strong performance of the group’s major areas of activity,” the directors report.