W. Davies $9M loss

Press, 9 December 1988, Page 20

W. Davies $9M loss

Wilkins and Davies, the Auckland-based construction company, has reported a $9,349,000 loss for the six months ended September 30, compared with a $2,154,000 loss for the same period last year.

The directors have decided against paying an interim dividend.

The result was a reflection of New Zealand’s economic climate and the lack of investor confidence, the director said in a statement. Indications were that the present trading environment would continue at least through to the early months of 1989. The directors said in a statement that the company would withdraw from property development activities because of reduced institutional investment and servicing costs.

Some of the company’s property assets would be sold to strengthen the company’s liquidity, because of the present economy. The company had recently renegotiated its funding and security arrangements with its bankers. In addition, the company is working with its financial advisers,

Coopers and Lybrand, to restructure its business, involving construction, marinas, and Hauraki Gulf land development. The company’s construction activities in the six months had been steady, but were lower than the budgeted turnover, the directors said. In spite of current trading conditions, work on hand at September 30 had been maintained at a similar level to the last two years. Since September, $3O million of new work had been obtained and the company was pursuing a number of big civil construction opportunities. The only property development in which the company had an equity participation was the Price Waterhouse Centre joint venture development in Christchurch, with Advantage Corporation (in receivership). Wilkins and Davies had a 50 per cent interest in the building. The Australian operations, based on marina

developments, were now established. In New Zealand planning approvals had finally been given for further marinas and the completed marinas are all running successfully. Other marina-related opportunities are being sought in Asia, Canada, the United Kingdom, and the Middle East, and the company was establishing itself as the Pacific’s leading marine developer. Turnover slipped 18 per cent to $64,674,000 in the latest six months, but after expenses, the company incurred a pre-tax loss of $73,400,000 ($4,257,000 profit previously). There was a deferred income tax credit of $1,642,000 ($1,065,000 provision) which reduced the net loss to $5,698,000 ($3,192,000). There were no minority interests ($75,000). Equity losses amounted to $1,355,000 ($397,000), and there were extraordinary losses of $2,296,000 ($716,000).