Nat. Pac. slumps as bid increased

Press, 25 February 1989, Page 29

Nat. Pac. slumps as bid increased

Sorento United, the Government Life subsidiary, will increase its cash offer for National Pacific Corporation by 1c to 45c because National Pacific has announced an interim dividend of 1c a share. Natiofial Pacific, owner of the National Insurance Company of New Zealand and property group, found its total profit slumped in the latest halfyear ended December 31, the result falling 85.5 per cent to $2,717 million, i The directors told the Stock Exchange yesterday that at the last annual meeting the chairman, Mr John Strahl, had forecast group net earnings of between SSM and S6M. The reasons why the result was less than forecast were: • Write downs of equity portfolios were more than expected because of the decline in the sharemarket in December. • A substantial shortfall in the predicted Trustees Executors’ result. • An additional tax provision payable for National Insurance in Australia. National Insurance and City Realties had traded profitably, in line with expectations for the half-year, they said. The unaudited profit statement shows that turnover rose 10.3 per cent in the latest period to $49.332M. However, after expenses the pre-tax profit was down 14.7 per cent to $6.525M. Tax took $1.833M less at $1.157M.

In addition, there were abnormal net losses of $532,000 ($4.658M previously) arising from unrealised losses on the share portfolio of National Insurance. Equity losses amounted to $304,000 ($5.855M profit) relating to losses from the trading of National Insurance Life. This left group net earnings before extraordinaries at $4.532M, down 26.2 per cent. Minority interests were $122,000 ($1.312M) and there were extraordinary losses of $1.693M ($14.227M profit) for a provision on net unrealised portfolio losses relating to non-insurance investment activities. The take-over by Sorento United had made no provision for dividends. The directors had sought clarification from the company and had been given an undertaking that Sorento would alter its offer by increasing its offer by 1c to reflect the interim dividend declared by National Pacific, they said. Those shareholders who had already accepted Sorento’s offer, or who wished to do so before the dividend was paid, would receive the dividend payment as soon as Sorento received it. The dividend, which will not have imputation credits, is payable on March 20, ex dividend on March 8. Government Life owns 64 per cent of National Pacific.