Elders says 72% profit jump sign of success

Press, 28 September 1988, Page 39

Elders says 72% profit jump sign of success

NZPA-AAP Adelaide Elders IXL’s 72 per cent lift in net profit to sAust6B4.BB million (SNZB7OM) showed it had succeeded as an international business, the company said. , It said brewing and agribusiness groups performed well above targets to turn in an excellent performance, and the finance group made steady profits despite the October sharemarket crash. ' The company has separated operating earnings from abnormal items for the first time, and said the record operating profit and, large abnormal profit of $Au5t236.26 million allowed it to make a one-for-five bonus issue. A company spokesman said the abnormal item was made up of about sAustl37 million profit on the sale of. Elders Resources shares, sAustl 17.29 million from the joint venture with Hudson Conway, Ltd, for the Courage pub chain in the U.K., a loss of about $3O million on equity ac-

counting the company’s joint venture with BHP Co and a goodwill write off of $22.50 million for acquisitions in the finance group. The brewing division increased profit before interest and tax to $657.27 million from $353.45 million. Elders said in a statement all three brewing businesses were above budget. Foster’s, the company’s flagship brand which is in its centenary year, was growing more strongly than ever. World sales rose 20 per cent in 1988, and exports from Australia to U.S. and AsiaPacific markets increased by 40 per cent. In the U.K. its market share doubled after full distribution into 5000 Courage pubs. The joint venture on the Courage pubs had realised £875 million for investment, and the brewing group had acquired strategic interests in U.K. breweries Scottish and Newcastle Breweries, Pic, and Greene King and Sons, Pic. Elders said the brewing group was now well

placed to take advantage of opportunities in 1989. The agribusiness group capitalised on the best agricultural trading environment in recent years to record good results from all core businesses and push earnings before interest and tax to $157.05 million from $80.41 million. Elders said firm commodity prices and good industry conditions meant a good year for the Australian agribusiness operation, but in New Zealand there were economic and industry problems. But the restructuring of the New Zealand operation which should improve its performance was nearly completed. The grain division’s new U.S. acquisitions had performed better than expected, and Elders grain was now the tenth largest grain handling and storage company in the U.S. Acquisitions in Europe by the wool division and in the U.S. by the meat division also helped agribusiness performance, but Elders said the brewing materials division had some difficulties with the

start-up of European operations. Elders said the finance group performed well despite the sharemarket crash. In Australia the property finance division made its best ever result, and turned in the largest single contribution to the Australian finance profit. About 40 per cent of the $63.40 million finance group profit before tax was earned overseas through continuing expansion in the U.S., Europe, Japan and Hong Kong. Elders Resources NZFP, Ltd, now 42 per cent owned by the Elders group, had more than doubled its ' size through the New Zealand Forest Products reverse takeover and become an integrated resources company ranking in the top 20 Austra-lian-listed companies and the top three in New Zealand. Elders Investments, 75 per cent owned by the group, had a SUS 9.2 million loss for its first eight months, but a strong balance sheet, including SUS2SO million of liquid assets.