Bad year for Quill H.

Press, 30 June 1983, Page 22

Bad year for Quill H.

The activities of Quill Humphreys, Ltd, the Christ-church-based liquor wholesaler, were being examined by the directors, after the company yesterday announced a reduced result in its latest financial year.

The unaudited group net profit fell 41.1 per cent to $392,859 in the year to March 31, but did not include extraordinary nontrading profits of $28,109 ($21,105), nor capital profits of $969,052 after “certain assets” which were revalued during the year were sold, and other assets were disposed of at book value. “The trading results are disappointing, and although major rationalisation and cost reductions took place within the economy during the year, these moves were insufficient to match the full decline in the trading profit,” the directors said. “We do not see any significant improvement in sales for the current year, and the whole of the company’s activities are being examined in the light of present trading.”

The contraction in the

economy became most evident in the second half of the financial year. The 1982 Budget imposed higher duties and sales tax on liquor, froze margins, and also prevented incomes from increasing. Sales throughout the group were below budget and profit margins were greatly affected by the discounting necessary in an extremely competitive liquor market, they said. As part of the rationalisation, certain assets which were not yielding a satisfactory return were sold. Stock levels were substantially reduced and restrictions placed on expenditure. The funds from these moves were used to repay S2M of the company’s total borrowings of ?4.8M. The profit was after providing $288,789 less for tax at $262,686. Because of the extension of the dividend the recommended final dividend of 5.5 c a share reduces the annual rate from 9c a share to 8.5 c a share (17 per cent). The tax-free dividend is payable on August 11, ex dividend on July 22.