Wilson Horton uncertain

Press, 2 July 1983, Page 22

Wilson Horton uncertain

PA Auckland The various distractions of the newsprint shortage and the price freeze must give Wilson and Horton, Ltd, cause for concern, the managing director, Mr H. M. Horton, says in the annual report. In the circumstance, it is “unusually difficult” to foresee the position and the result for the company by March, 1984, he says. Wilson and Horton profit for the March 31 year was $5,434,732, down 7.41 per cent on the previous year. “The immediate future is clouded by the prolonged strike at Kawerau and other industrial and regulatory pressures on costs and revenues.” “The demand for our printed products remains high and is growing, yet one must feel a measure of frustration that the company, its staff and shareholders are checked in their aspirations for a better future.” Nevertheless, Wilson and Horton — the printer and publisher of the “New Zealand Herald” — has never been better placed, with modern plant and premises in its main operating activities, says Mr Horton. “The change-over of the ‘Herald,’ having been so successfully completed, has left us in a very strong position in the Auckland urban and provincial areas, with many fresh opportunities awaiting us.” A steady, and in some cases spectacular, improvement in profitability of commercial divisions, which have performed less satisfactorily in previous years, was achieved after the reshaping of some policies, he says. “There is clearly a

prominent future for the company in electronic communications. The newspaper industry both here and elsewhere, is intent on redefining its role in communications with positive steps into electronic media.” In his review, Mr Horton says that the “Herald” by transforming the news and feature pages from hot metal setting to photocomposition, completed the most radical and complicated change in its 120-year history. He says the end of the financial year signalled the last phase in the change and culminated almost five years of planning, equipment selection, staff training, and final installation. The final cost was more than $5.5 million. The second major enterprise for the year was the construction of the 5000 square metre Porana Road factory in Glenfield for the security print division, at a cost of $5 million. Work on the security printing of cheques and bonds, shares and confidential documents started in April. Later this year a new Dutch-built continuous web litho press costing more than $1 million will be installed to complete the most modern installation of its type in New Zealand, says Mr Horton. “From its own resources, the company has continued to invest heavily in plant and equipment needed to sustain and develop its various operating divisions.” Mr Horton says $6.9 million was invested during the financial year, after the previous year’s $9.3 million. Although earning rates remained at a high level, the impact of assets bought for development and yet to achieve their potential has

lowered the company’s return generally. Depreciation rose sharply during the year — from $2,135,213 to $3,507,912 on a straight-line basis. Much of this expense was incurred for Northern Television, Ltd. Shareholders’ equity has risen to 64.9 per cent. Reviewing operations. Mr Horton says that rigid controls on wages and prices caused problems for the ‘Herald’ in recovering extra wage and newsprint costs incurred before the freeze. “Although applauding the need for restraint by all groups in the economy, I believe that the lack of regulatory machinery to cope with anomalies cost this company dearly.” Higher prices for newsprint are now inevitable as the contract with Tasman Pulp and Paper Company first negotiated in 1966 expires this December, he says. Newsprint cost Wilson and Horton more than $l3 million last year. In spite of the economy, the volume of advertising reached a record level, although classifieds was slightly down. Sales of the ‘Herald’ for the year increased by 2,065,230 copies to 74,749,765. The three main sections of the commercial printing division improved their position in the market and a stronger marketing approach showed increased sales volumes. During the year Wilson and Horton increased its

shareholding in Northern Television, Ltd, purchasing shares from existing minority shareholders. "It would be realistic to expect major losses for this operation until the Government fulfils its 1981 pledge to permit private television broadcasting on a meaningful basis." says Mr Horton. Efforts of Calbedivision New Zealand, Ltd, in which the company has 47 per cent led to a quickening of interest in cable television in New Zealand. After much delay and frustration some progress was made by Viewdata Information Retrieval, Ltd (in which W and H has 15 per cent) in obtaining clients and Government approval for business data systems. As reported, tax-paid profit for the March 31 year fell by 7.4 per cent to $5,434,732 on sales up 12.31 per cent to $80,514,198. The consolidated balance sheet shows that total shareholders’ funds rose from $32,911,762 to $36,435,516. Current assets were reduced from $21,534,147 to $19,950,751, and current liablilities from $15,119,709 to $14,811,118. The auditors’ report has been qualified for the company not presenting supplementary current cost accounts as required by the Society of Accountants. The chairman, Mr G. R. Brabant, foreshadows a resolution for the July 27 annual general meeting to increase directors’ fees when legislative restrictions