DIC buy leads to A. Barnett loss

Press, 21 October 1989, Page 35

DIC buy leads to A. Barnett loss

The acquisition of the DIC stores sent Arthur Barnett into the red for the year ended August 1, the retailer incurring a total loss of $1,410,000 ($1,026,000 profit previously).

The directors are not recommending a final dividend. This means that the annual dividend rate is the 4c a share (8%) interim payment. The annual rate in the previous period was 12c a share.

The company said that last year’s profit had been restated from the $852,000 reported in 1988 because of a change in accounting by associate company, Arthur Barnett Properties. The difference arose in an increase in the unrealised net changes in value, from the $465,000 reported last year to $639,000. This year’s unrealised gain was $107,000. The 1988 financial year included only eight months trading from the 16 DDIC stores.

“While naturally disappointing, the result was anticipated. The company continues its restructuring

phase while also competing in a difficult retail environment,” the directors said.

Restructuring of the 16 DIC department stores, the closing of the Karangahape Road store and the amalgamation of the Auckland head office in Dunedin had a significant impact on the trading result for the year, they said.

“The traditional family store image of Arthur Barnett has now been extended to the North Island, with the name change of all North Island stores to Arthur Barnett on August 1,” the directors continued. “Coincidental with the change of name, the com-

pany has introduced its successful charge card to customers in the North Island.

“As a result of this new identification and the excellent response of customers to the charge card, the company is well placed to benefit from the increases in consumer spending when the expected improvement in the economy eventuates.”

Shareholders’ funds are now $17.9 million, down SI.6M which equates to an asset backing of 349 c for each 50c ordinary share (381 c Issued capital is steady at $2.566M-. Working capital fell $2.224M to $16,9M, and the current ratio eased from 2.4 to 2.3 to one.

Arthur Barnett audited result for year ended August 1. 1989 ($000) 1988 ($000) Gross revenue 107,558 91,406 Pre-tax result (2006) 189 Tax credit 612 6 Trading profit (loss) (1394) 195 Minorities Equity earnings (33) (32) Net profit (loss) (1427) 163 Extraordinaries (90) 274 Unrealised gains 107 639 Total profit (loss) . . . (1410) 1026