Sales running higher for Ernest Adams

Press, 26 July 1989, Page 31

Sales running higher for Ernest Adams

Sales are running higher than last year for the Christ-church-based listed baker, Ernest Adams. Reporting this to the company’s annual meeting yesterday, the chairman, Mr H. A. Adams, said the sales were also ahead of budget.

“We are making an even wider range of goods, presenting them well, and selling over the widest available area. We do anticipate having rather more competition than in the recent past, but consider we are well placed to meet whatever may come,” Mr Adams said.

The company had increased productivity, without displacing staff. At present 16 apprentices were being trained.

“We have put in place a lot of labour-saving machinery, but have used the . people displaced to produce an everwidening range of new bakery products. This method of utilising the skills of our staff is very gratifying to me. We cannot operate a business in isolation from the rest of the society in which we live. “There cannot be many people around who are not concerned with the current unemployment situation, but precious little is being done about it. If all companies had tried as hard as we have to utilise their surplus labour by diversification, it may well be that this country would be in a very much better state,” Mr Adams said.

Export sales topped a million dollars last year and were expected to be higher in

the current year, Mr Adams said. One new order had been received from Australia for more than a .million fruit mince tarts. It was worth $400,000. The company had surplus funds out on deposit for a considerable part of the year ended March 31 in spite of high captial expenditure, Mr Adams said.

Mr Adams said profit on sales for the year ended March 31 was 10 per cent, and sales were a record.

All branches were trading well, and the Country Bake business had been smoothly integrated as the company’s manufacturing arm in Auckland.

The company’s managing director, Mr D. H. Booth, reported new bulk storage was being built in Christchurch, the Palmerston North bakery and office was being extended, and new machinery was coming from Britain, Switzerland, West Germany, and the Netherlands.

The company received a tribute from its auditors.

Mr Keith Sharp, of Chambers Nicholls, departed from the typical auditor statements about accounting policcies.

"I’ve noted the financial strength of the company,” he said.

The cash flow was positive, and the company paid tax. Many companies reported large profits and paid no tax, Mr Sharp said. “That means they haven’t earned a true profit. Here, we have a company earning a real profit.” A significant amount of in-

putation was available with the dividends. Only the previous day he had looked at the affairs of a client who had shares in nine companies. Of these, only two had imputa- •, tions for shareholders — one was Ernest Adams, and the other was the Bank of New Zealand. Mr Sharp even had praise for the photographs in the annual report. These, he said, showed the company had its priorities right. The boardroom was not palatial. The money was going into the new machinery featured in the document. Ernest Adams should continue to grow in its present manner, the chairman of the Commerce Commission, Dr Susan Lojkine, who is a director of the firm, said. She was replying to a shareholder who had pressed the point of view that the company should look for more diversified overseas markets — at present, it is concentrating on Australia in exporting. Dr Lojkine said the company’s production machinery, people, and marketing efforts had been developing in step. The company had not allowed marketing to outstrip productive capacity. It was important that sales should not outpace productive capacity. Potential for expanding sales still existed in the North Island and in Australia, she added. The meeting confirmed the final dividend of 3.5 c a share.