PDL profit up on sales boost

WELLINGTON - Electrical equipment manufacturer PDL Holdings reported a bottom-line profit of $4.5 million for the March year, up from last year's $1.2 million loss.

Normalised, profit after tax, excluding the effect of abnormals, totalled $5.5 million compared with a profit of $1.8 million the previous period.

This was "an encouraging turnaround," said chief executive Mark Stewart.

In March, PDL returned to dividends for the first time since December 1998, with a fully imputed 10c per share payout.

Mr Stewart said the company had experienced strong sales growth in the year to March both in New Zealand and overseas markets.

Overall sales were up 11 per cent to $357.4 million from $320.9 million on the previous year, with a 12 per cent increase in New Zealand sales.

Sales growth in New Zealand reflected strong demand last year on the back of solid growth in the construction and residential building markets, Mr Stewart said.

"Overseas subsidiaries, notably PDL Industries Australia and PDL Industries Asia, increased sales significantly, reflecting vigorous Australian economic growth and a continuing recovery in the Asian markets."

Earnings before interest, tax and abnormal items totalled $16.6 million, up 38 per cent from $12.1 million in the previous period, Mr Stewart said.

This was primarily due to a record performance in the distribution division's trading result and strong performances in electrical products and the plastics businesses.

The December-quarter trading period was traditionally down, and the March quarter had shown a softening in demand and profitability, driven by several factors.

"These included a slowdown in economic activity, a worsening level of business confidence in the New Zealand market, and the impact of restructuring costs related to streamlining PDL Australia's business into two core businesses of electrical products and electronics products," Mr Stewart said.

"With the current significant softening in forward orders, the company is addressing its overall working capital requirements to better align these to its forecasted outlook for the 2000-2001 year."

-NZPA