Angus to cut debt

Press, 9 December 1988, Page 21

Angus to cut debt

PA Wellington Construction company, Angus Group, is preparing all its development projects for sale as part of a drive to reduce debt, acording to chairman, Mr Peter Grayburn. He told shareholders at the annual meeting that directors felt the 28 per cent ratio of shareholders’ funds to total assets was too low.

The logical course was to dispose of a significant number of assets, he added. The sharemarket crash of October, 1987, forced a number of Angus’ joint venture partners to withdraw from deals leaving it to resume total responsibility. “This additional financial responsibility coincided with a rapid weakening in tenant demand, a flood of property coming on to the market and a retreat from the market by major institutions.” For the year ended July 31, Angus posted a tax-paid profit before extraordinary items of $863,000, down from $3.4 million the previous year. A writedown in the value of development projects by $B.B million produced a

final loss of $4.5 million. Mr Grayburn said that despite a “cluttered” market for property, encouraging progress was being made as the projects were prepared for sale.

“While the forward workload for our construction division is shrinking, we are making excellent progress on all our projects, particularly the new $4O million Karangahape Road project, and the Price Waterhouse project due for completion in May next year,” he said. Mr Grayburn told a reporter he was sure Angus could turn its financial performance around. He acknowledged shareholders would be disappointed with the company’s share price —45 c compared to asset backing of 150 c — but he assured them that directors were doing everything possible to protect the value of their shares.

Angus will not pay a final dividend this year, but Mr Grayburn said the board intended to resume dividends once capital financial ratios were restored to a healthy level.