Tag gains help $3.IM profit
PA Wellington Tag Corp has announced a $3,171,801 profit after tax and minority interests for the year ended June 30. This compares with $3,342,090 in the previous 15 month period. The result was achieved on an improved pre-tax profit of $4,106,071 this year, up from $3,780,552. This was reduced by a tax provision of $209,219 ($551,366). Losses attributable to minority interests increased the profit by $211,949 (reduced by $573,486) while there was a nil share of retained profits from associate companies ($686,390). Realised losses on property values of $937,217 (nil) gave rise to the $3,171,801 result. An unrealised increase in property values of $1,016,523 ($2,205,700) fave an over-all profit of 4,188,107 ($5,547,790). In announcing the result, Tag chairman, Mr Peter Wise, said good gains were made during the year from trading and investment activities, but the pace of activity slowed considerably in the second half — a trend from which he saw no immediate relief. Progress in the pro-
perty sector was particularly pleasing and the sale of the Motor Services Group was made on favourable terms, coinciding with oil industry deregulation minimising deregulation’s impact on Tag. Tag also lifted its shareholding in listed electrical engineering firm, Lectrica, Holdings, to 51.8 per cent, enabling the consolidation of its results into Tag’s accounts for the first time. This had an unexpectedly detrimental effect on Tag’s profitability, but Mr Wise expected this would be improved. Further link unit offerings during the year were precluded by the effect of the sharemarket crash. “Issues in the previous year were a significant source of income for us and we haven’t been able to repeat this,” Mr Wise said. “Contrary to popular belief we have not lost our shirt on the link unit concept since the crash. We have absolutely no exposure to any underwriting risk.” Link unit holders had lost far less than if they had directly held the shares themselves, he said. Someone buying a Brierley share at the time of the link unit issue would have lost $2.50 compared
to a loss of 50c on the BIL-link offer. Since balance date, Tag had taken control of The Terrace Project and the restructured board was working to strengthen TTP. It was hoped soon to put forward a plan which would see Property Link separated from its present structure within Tag Corporation, Mr Wise said. The proposal, if approved, would result in the cancellation of Tag Property Link shares and the issue of an identical number of shares in Property Link, Ltd. Property Link would then change its name to Tag Realty Ltd and seek independent Stock Exchange listing. Control would be held by Mr Wise’s property investment arm, the Anthony Group. Tag property manager, Mr Brian Bennett, is the next largest shareholder. Tag’s total capital funds at June 30 stood at $22.02 million while total assets during the year rose 68 per cent to $44.77 million. A final dividend of 325 c a share and 2c per Property Link share has been declared. Bonus Property Link shares will qualify for the dividend. Dividends are covered 3.7 times by earnings.
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Press, 28 September 1988, Page 38
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519Tag gains help $3.IM profit Press, 28 September 1988, Page 38
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