Ceramco has $6.9M profit

Press, 1 December 1988, Page 26

Ceramco has $6.9M profit

The group after-tax profit of Ceramco Corporation for the six months ended September 30 was $6,962,000, the chairman, Mr Alan Gibbs, announced yesterday. The provision for taxation was $704,000, and minorities took $143,000. Mr Gibbs said that comparisons with the results for last year were not meaningful as Ceramco Corporation was not formed until July, 1987, and the 1987 results related to a three-months trading period. The comparative figures include the results of various operations which have since been sold or discontinued, including Crosby Tiles, Metz, Professional Uniform, Kamo Green Refractories, Musico, Abrasiflex, John Webster, Wakefield Bros, Izona, and Manhattan. Extraordinary items, being losses on the disposals of and provisions for discontinued businesses, amounted to $2,868,000 ($247,000 profit last year) resulting in a bottom line profit of $4,094,000 ($9,676,000 last year). In view of the lower profit the interim dividend has been reduced to 4c a share, non-franked (8 per cent) compared with 6c share (12 per cent) last

year, and will be paid on December 19 to shareholders on the register at the close of business on December 9. This interim dividend payment will total $3,727,000. For the purposes of calculating the dividend the company’s ordinary share register will close at 5 p.m. on December 9 and reopen at 9 a.m. on December 12. “The low levels of both consumer demand and industrial activity prevailing throughout the period adversely affected many group operations, especially those reliant on the domestic market. While Ceramco has fared better than many companies the directors regard the result as disappointing in terms of earning rates and overall performance,” Mr Gibbs said. “Some companies in the group, however, continued to perform well. In particular, Bendon Industries and New Zealand China Clays have made substantial contributions. Bendon’s export drive into the Australian market has been well received and reorder levels have exceeded all projections. There is substantial and growing demand world wide for China Clays unique product and expansion of production

capacity has enabled the company to further increase export sales. “The directors expect that the tight economic conditions and depressed trading levels will continue for at least the remainder of the financial year. The current political uncertainties have certainly aggravated the situation and have adversely affected business confidence. Until these uncertainties are resolved by the Government, confirming it will stay on the Rogernomics course, no improvement can be expected. “Ceramco Corporation has already undergone very significant restructuring to meet the challenges of the new open economy and more competitive marketplace. However, in light of the current trading conditions and the prospect of demand levels continuing below those previously anticipated, the board plans further rationalisation of existing businesses over the next six months. “The directors are confident, despite the current economic downturn, that given the rationalisations envisaged, Ceramco will be well placed to benefit from the upturn in the economy when it comes,” Mr Gibbs said.