Steel and Tube div. in spite of loss

Press, 11 July 1989, Page 28

Steel and Tube div. in spite of loss

In spite of incurring a total loss of $6,761,000 in the year ended March 31, the directors of Steel and Tube Holdings are recommending a final 25c (50 per cent) dividend to shareholders. The directors of the group told the Stock Exchange that proceeds from the sale of assets would sustain the 25c a share dividend recommended. The divestment programme had enabled the group to. reduce its borrowings. After the acquisition of Cable Price Steel and Cable Price Reinforcing from Cable Price Downer, a Brierley Investments subsidiary, in April, borrowing stood at about $3O million in relation to shareholders’ funds of about SIS6M.

The costs of restructuring, which were incurred or provided for, because of the group’s divestment programme had been included as the extraordinary item of $6.1 million, they said. The group’s trading suffered from the low activity in the economy, which was shown in the trading loss.

Metals Merchandising incurred a drop in sales of about 10 per cent, but profits were slightly less than 50 per cent of those in the previous year. Redundancy and reorganisation costs, together with bad debts, had an impact on the result.

The engineering and contracting businesses traded unsatisfactorily, and significant losses continued. This position was partly relieved through

the sale of the building services activities during the year. The vehicle division incurred substantial losses during the first four months, when the Japanese franchises were operated and when the market was at a particularly low ebb. In subsequent months, the division produced profits consistently, but there was a considerable loss for the year, the directors said. The sales of Bundy Tubing and the Healing cycle and paint businesses were made

during the year, plus the sale of Web Grating after the balance date. Over all, the manufacturing operations produced a small profit. The acquisition of the steel distribution and steel reinforcing businesses of Cable Price Downer, from April 1 were expected to put the company in a leading position in the industry, when combined with Steel and Tube’s own operations, the directors said. •; The dividend is payable after the annual meeting on September 15, ex dividend September 6.

Steel and Tube audited annual result ended March 31. 1989 1988 ($000) ($000) Turnover 408,387 631,767 Pre-tax loss . . . . (1813) (2251) Taxation (credit). . . 539 (1911) Net trading loss (2532) (340) Minorities■ 1870 1726 Equity losses (157) (336) Group profit (loss) (639) ■ 1050 Extraordinaries (6122) (4847) Total loss . . (6761) (3797)