PDL back in profit with $3.3M result for year

Press, 29 July 1989, Page 23

PDL back in profit with $3.3M result for year

PDL Holdings, the Christchurch manufacturer has returned to profit with a good result of $3.3 million for the year ended March 31. The previous year, an after-tax profit of $705,000 was turned into a bottom line loss of SI.7M by extraordinary losses, mainly in the restructuring of the associate, Lasercorp Holdings. Lasercorp, which specialises in distribution of electrical products, reports a bottomline loss of 51.534 M for the year, however. This compares with a profit of 52.165 M the previous year. Turnover of PDL for the period totalled $252,749,000, compared with $223,402,000 in the year ended March 31, 1988, an improvement of 13 per cent. Of the total revenue, $173.35 million was generated within New Zealand, a further $19.4 million was earned from exports and another $59.9 million in sales was achieved by PDL’s overseas-based activities. The managing director, Mr Don Sollitt, said PDL is well positioned to take full advantage of the significantly higher growth rate of vibrant Pacific Basin economies whilst awaiting the promised recovery in the New Zealand economy. “Given the adverse domestic economic climate we are fortunate to be able to reap the benefits of decisions PDL made as far back as 1972 to establish complementary manufacturing operations overseas,” he said. “Our Malaysian operations

have enjoyed booming conditions in the SouthEast Asian region while our expanded Melbourne facility is now fully operational and enjoying the stimulus of an encouraging manufacturing climate in Australia.” “We have completed a very positive year and are reporting a profit after tax and extraordinary items of $3,072,000 which compares with a loss of $1,781,000 in the 1988 year,” said the executive chairman, Sir Robertson Stewart. Mr Sollitt added that the significant factors in PDL’s “remarkable rebound” were: • The sales benefits continuing to flow from PDL’s intensive research and development programmes. • The PDL Group’s offshore diversification. "Nevertheless, PDL remains deeply committed to continued production in New Zealand where the Christchurch manufacturing base has a key role as the design centre for products we market internationally. “PDL is an internationally oriented company of long standing which can maintain a local base because of the comparative advantages that flow from our high technology production facilities coupled with the business location advantages of Canterbury.” The directors recommend a final dividend of 3.75 cents a share (15%) be paid on September 22. This will carry a full imputation credit of 1.85 c a share. With the 7.5 c interim dividend, the

annual dividend totals 11.25 c (45%) for the year, covered twice by available earnings. “The market for electrical products continued to decline in New Zealand during the year, as the general recession caused by the Government’s policies deepened to the detriment of the housing and construction industries,” said the executive chairman, Sir Robertson Stewart. Lasercorp accelerated its restructuring at the cost of significant nonrecurring expense,” he added. “It is that factor which resulted in the company sustaining a loss of $1,534,000, compared with a profit of $2,165,000 in the 1988 year.” “Lasercorp is, however, now in a profit mode. Sales are increasing and we are looking into what we hope will be permanent growth,” said Sir Robertson. The managing director, Mr David Bainbridge, added that Lasercorp now had potential for a significant improvement in both revenue and earnings due in part to the failure of many competitors. “The restructuring included the formation of Laser Trade Limited a merger vehicle for the previously duplicated administrations of Nesco Limited and A. and T. Burt Limited,” said Mr Bainbridge. “In eliminating unnecessary duplication, we have achieved substantial savings in overheads, improved personnel control and a consolidated marketing strategy. “The benefits of new

distribution policies include improving margins and greater penetration of highly competitive markets,” he added. “The June quarter results show a most en-

couraging turnaround in both sales and profitability, although significant market buoyancy is not yet fully apparent.” The company expects a satisfactory profit in the current year.

PDL HOLDINGS RESULT FOR YEAR ENDED MARCH 31 N.Z. — local N.Z. — export Overseas subsidiaries 1989 ($000) 173,350 19,490 59,909 1988 ($000) 154,745 13,412 55,245 Total sales 252,749 223,402 Profit before tax 3,260 2,141 Tax (1,355) (954) Net profit after tax 1,905 1,187 Minority interest 976 (809) Equity Earnings 448 327 Profit before extraordinaries 3,329 705 Extraordinaries (net of tax) (257) (2,486) Net profit (loss) after extraordinary items 3,072 (1,781) Earnings per share 24.6c (5.2c) Net tangible asset backing per share 2.61C 2.21c LASERCORP HOLDINGS RESULT, YEAR ENDED MARCH 31 1989 1988 ($000) ($000) 138,976 121,627 Net profit/(loss) before tax (2,823) 5,302 (1,252) 2,347 Net profit/(loss) after tax... . (1,571) 2,955 Minority interest 103 — Net profit/(loss) before extraordinary items (1,674) 2,955 extraordinary items 140 (790) Net profit/(loss) after - extraordinary items (1,534) 2,165 Earnings per share (1.5C) 3.1C Net tangible asset backing per share 42.6c 42.9c