McKenzies9 Year “Disappointing”

Press, Volume CVI, Issue 31119, 23 July 1966, Page 18

McKenzies 9 Year “Disappointing”

(New Zealand Press Association!

WELLINGTON, July 22. Main problem of McKenzies (N.Z.) is. the increased cost of selling, says the chairman, Sir John Hott, in his annual report, discussing the “disappointing” result for the year to March 31 last.

“Our turn-over increase was 14 per cent, and we believe this is a better result than that shown by most New Zealand and Australian companies in the retail field during the last year,” he says. “However, a substantial rise in operating costs and reduced profit margins stemming from increased competition have minimised the effect of our increased turn-over and have meant that we have produced

;a net result below that of last year.” The main problem lies in the incerased cost of selling. Wages and salaries for the year rose by £141,295 to £1,046,144. Seling costs, as distinct from administration salaries, rose by £133,264. Wages of new branches accounted for £89,523 of the increased wages. The company has sent executives overseas to study methods of meeting the problem, and has put into operation plans to reduce selling costs. During the year more than £300,000 was spent in developing new operations, most of it on supermarkets in Hastings and Rotorua, which will be operating before the end of July. Neither at balance date had contributed to profits. Consolidated net profit, as i announced, was £154,712 against £190,163 the year be-| fore, representing an earning! rate of 9.3 per cent (12 per ; cent )on capital. Result is after £135,7211 (£132,803) for depreciation and £150,936 (£178,541) fori tax. Steady 10 per cent dividend; takes £165,137 (£158,883) I £10,425 more than the net profit.