Commercial Wattie margins lower

Press, 12 April 1979, Page 22

Commercial Wattie margins lower

The half-year, to January, 31, of Wattie Industries, Ltd, was characterised by keen : competition and net profit! margin was down from 4.8 per cent to 4.4 per cent. A 12.1 per cent increase in group sales to 5156.5 M was achieved to give a 15.7 pei cent rise in group pre-tax; profits but without the benefit of the special inventory related tax concession provision for taxation increased 44.4 per cent to $4.3M, making the rise in net profit, before equity interests, 2.7 per cent to S6.BM. On top of this, however, associated companies were able to make a substantially improved contribution to over-all results. Dividends received from associates increased §150,000 to $412,000, and Wattie Industries’ share -of tax-paid earnings retained bv associated companies increased §1,037,000 to SI.7M. The total tax paid earnings of the group, on an equity basis, increased 20 per cent to a record half--yearly total of §7,297,000. An interim dividend of 7| per cent (3.75 c a share) will be paid, compared with last

■, year’s interim dividend of; ,‘3.5c a share. This dividend; 11 will be available wholly tax-! tjfree to shareholders, unless; 1 they have elected to receive (.'dividends wholly from revei nue sources. '; Dividends, and the final ’convertible debenture inter-. best, will be paid on June 15. The market for consumer 1 !food-packs was very com-1 ' petitive, with evidence that* 'I there is currently more care; Cbeing exercised in the dis-; 'iposal of the household bud-i ’get. This had the effect of reducing the margin of profit) j on each dollar of sales in! ' that sector of trade, but this! ' was offset by stronger trad-; . ing in sales of industrial ’ products and services. A higher return of 6.1 per; i cent (compared with 5.9 per! j cent a year ago) was) . achieved for the six months on shareholders funds, indic- . ating an improved over-all 7 usage of assets. ) The group obtained a fur- - ther significant increase ini exports which for the half; I vear rose 27.3 per cent to 1 SB.3M. t Subject to the final out-'

'turn of current seasonal production, which in some, products, has suffered from' adverse weather conditions,' additional export gains are! expected in the second half of the year. The company continues to; maintain a strong financial position, with ample liquid-; 1 ity to maintain a steady pattern of growth as suitable ! opportunities for further development occur. Since the last interim report shareholders’ funds inicreased §16,529,000 to 15120,263,000,I$120,263,000, mainly through | retained earnings but in- ! eluding the proceeds of 1713,500 ordinary 50c shares -issued under the employee 'share scheme. ! A private debenture stock placement of S2M has been arranged, mainly to fund repayment of stock amounting to SI.SM which will shortly fall due for repayment. An overseas credit facility for SUS4M has not yet been exercised. I Since January 31 Wattie ! Industries 50 per cent interijest in Precision Plastics Ltd, [has been sold to its former partners in that company.