Strong markets for Colyer Watson

Press, 10 April 1979, Page 14

Strong markets for Colyer Watson

Commercial

The market for the products of Colyer Watson Holdings, Ltd, particularly hides, is stronger than for many years, and indications suggest that this will remain the case for the forseeable future, says the chairman (Mr C. R. Pearce) in the first annual report since the company went public. A number of factors could alter this, however, including fluctuating exchange rates and international political uncertainties, he says.

“Despite these problems, a good start has been made to the current trading period, and the group faces the future with cautious optimism. I “All the commodities that the group exports — the products of the freezing industry — have shown continued price increases during the year.

“This is particularly so with cattle hides, where the increases have been unparalleled. “Currently the producer is

receiving nearly twice as much for a kilo of hides as for a kilo of beef — quite an unusual situation. “The financial interest in tanneries is enabling the company to take the fullest advantage of the Government’s export incentives. “Progressively the company is also finding a greater acceptance of this semiprocessed leather in markets that traditionally purchased only raw material,” Mr Pearce says. The company has a whollyowned subsidiary, Robert Hill and Son, Ltd, trading in sheepskins and woolskins for both the domestic and export market.

Recent negotiations have resulted in the acquisition of North Canterbury Wool and Fellmongery, Ltd, Kaiapoi, in a joint-venture arrangement. Colyer Watson also holds 50 per cent of the shares in Bulk Exporters, Ltd, onethird of the shares in Payes Bros., Ltd, (tanners), 50 per cent of Bovine Products (N.Z.), Ltd, 44.4 per cent of Colyer Fehr Proprietary, Ltd (Australian Tallow Merchants), a 50 per cent interest in N.Z. Portside Storage, Ltd, (bulk tallow storage at Napier and Bluff), and a half share in Southland Tannery, Ltd.

As announced, group net profit was $273,550 on turnover of $53.8M.

The profit was after providing $153,091 for depreciation. There was a tax credit of $36,481 from the overprovision of tax from previous years and taxation rebates on export incentives.

Shareholders’ funds were $3,346,593, consisting of $2.5M ordinary capital, $500,000 in share premium reserves and $346,543 in capital reserves. . The earning rate on shareholders’ funds was 8.2 per cent and on capital 11 per cent. Shareholders’ equity was 20.5 per cent. Working capital was $1,620,758, and the current ratio was 1.1 to one. The recommended annual dividend of 6.5 c a share (6.5 per cent) requires $162,500 and is covered 1.7 times by the profit. The shares last sold for 145 c for a dividend yield of 4.5 per cent and an earnings yield of 7.7 per cent. The price-earnings ratio was 13.