Waste Management has profit decline

Press, 18 February 1989, Page 21

Waste Management has profit decline

Waste Management N.Z. had a slightly less profitable year to December 31, but the company claims "significant growth” in volume and revenue of sales. However, as with its annual report last year, the amount of sales is not disclosed. The directors recommend a final dividend of 5c a share making a total for the year of Bc. This compares with a total of 12c for the previous 16 months. The latest dividend is payable on April 21. The company reports a trading profit of $1,957,000, which was 2.8 per cent down on the previous 12 months ($2,015,000) and compares with $2,479,000 in the last reporting period, which covered 16 months. After $232,000 of goodwill was written off the befofe-tax profit was $1,725,000, down 3.4 per cent on the previous 12 months $1,786,000 and the previous reporting period’s $2,174,000. Tax, (at 28 per cent compared with 48 per cent) took only $579,000, compared with $1,019,000 and $1,185,000.

Extraordinary items provided $lOO,OOO compared with $1,225,000 in the previous reporting period. The bottom-line result, after extraordinary items, at $1,246,000 was 37 per cent down on the previous 12 months’ result of $1,992,000, and compares with $2,214,000 of the previous 16-months accounting period.

The extraordinaries in the latest year include a benefit from the adjustment of previously deferred tax to reflect the new tax rate, offset by a provision for costs associated with an indemnity claim from the purchaser of Carbonic Industries, of Christchurch. The previous period’s extraordinary item was capital profit on the sale of Carbonic Industries. Volume of wastes fell during 1988 in some sectors of the economy, particularly manufacturing and construction, the directors say. The increase in businesses going into receivership resulted in a significant increase in bad debt write-offs and increased provisions for uncollectable

debts. Goodwill write-off has been changed to meet the standards of the Society of Accountants. It is now being amortised over 20 years through the profit and loss account instead of over 10 years direct to retained earnings. .