W. Davies loses $28.4M

Press, 1 August 1989, Page 38

W. Davies loses $28.4M

Wilkins and Davies, a listed Auckland construction company, suffered a heavy bottom-line loss of $28,422,000 for the year ended March 31. No interim dividend will be paid. The directors said the company’s results were adversely affected by the failure or inability of other companies to honour contractual commitments. This not only resulted in many bad debts, but also compromised the value of several developments. Delays in the issue of development approvals and the downturn now appearing in the Australian market resulted in an inability to sell development projects in Australia which, coupled with the poorer than expected performance of two Australian subsidiary companies, contributed to the over-all loss of the group. In a major restructuring exercise, the directors announced, the company had gone back to basics by concentrating on its core construction and engineering activities and placing all its property and other investments on the market. The restructuring will involve separating the construction operations and assets from the group’s other activities, which will be divested. Under the new company structure, it is intended that all investments which have been placed on the market will be separated with their own funding and security arrangements from the rest of the group. The company has acted to significantly reduce its overheads during the year, but the full benefits of this will not be apparent until the end of the 1989-90 financial period. In the company’s interim report for the half-year ended September 30, 1988, the directors announced that its Australian operation, based on marina developments, was now established. Planning approvals had been given for further marinas in New Zealand, and other marina-related opportunities were

being sought in Asia, Canada, Britain and the Middle East. No mention of these was made in yesterdays’ report to the stock exchange, for the full year ended March 31. On the extraordinary losses in the full-year result, comprising 56.159 M from :subsidiaries and $2.063M from associate companies, the managing director, Mr P. D. Mataga, of Auckland, would not be drawn last evening. He declined to say what the losses were made up of.

Wilkins and Davies preliminary result for year ended March QI 1989 1988 $000 $000 Turnover 120,538 139,470 Profit (loss) before tax (23,238) 866 Income tax . ... .......... 3256 280 Profit (loss) after tax. . Share of associated < (10,982) 1146 companies’ retained profits (losses). . . (743) (152) Profit (loss) before extraordinary items Extraordinary items 20,725 994 Subsidiaries. (6159) 904 Associated companies (2063) 495 Profit (loss) after extraordinary items . Unrealised increase in property values in investment companies (28,947) 2393 Subsidiaries 525 4282 Associated companies — 1159 Surplus (loss) for the year including unrealised gains . . . • (28,422) 7034