Heavy loss for Woodstock

Press, 1 December 1988, Page 24

Heavy loss for Woodstock

Woodstock Investments reported an audited operating loss of $1,880,000 for the year ended July 31. Extraordinary losses of $2,477,000 reduced the bottomline to $4,357,000. No dividend will be paid. The executive chairman, Mr G. S. Greenlees, said that the result was a reflection of the extremely difficult market conditions and dramatic decline in asset values experienced in the deer, goat, and kiwifruit sectors. The delay in obtaining long-term funding also led. to a high interest cost component within the result. The net asset backing at balance date was 34c a fullypaid share and the company reported an equity ratio of 39%. The physical operations were successful, but the financial returns have been poor, with the exception of packaging and coolstoring of kiwifruit which has shown an operating profit. The company believes that the present prices for assets

in the kiwifruit, deer and goat industries has little downside. In fact, there are many indicators including lower interest rates, a weakening New Zealand dollar and improved efficiencies in marketing that suggest that values in the kiwifruit, deer and goat industries will recover. Fundamental to this recovery will be the injection of a substantial amount of new equity as all three industries are burdened with an extremely high level of debt because of the dramatic downturn in values experienced over the past two years. In light of the loss and its effect on the company’s equity ratio an asset reduction programme is currently under way. The sale of the company’s deer farm to a partnership was the first step in this programme. The directors are looking forward to an improved performance in the current financial year, Mr Greenlees said.