Drop in confidence hits textile company's profit

Auckland-based textiles manufacturer Designer Textiles yesterday posted a "flat" after-tax profit of $1.45 million for the year, down 16 per cent or $227,000.

The result followed a major drop in business confidence in New Zealand and Australia in the second half, chairman Kerry Harding said.

Earnings per share dropped from 5.4c last year to 0.004c this year.

However, total group sales were up 40 per cent to $62 million and sales beyond Australasia were up $2 million on the previous year to $9 million.

"Among our objectives this year will be the establishment of a sufficient volume of trade in Northern Hemisphere markets to provide a substantial and stable customer base."

He said Australasian business had suffered tight margins because of a downturn in business confidence.

The company's Brisbane business, Logan Textiles, exported up to 40 per cent of its output, and Prato Textiles in Auckland sold 10 per cent of its total turnover as merino fabric overseas.

Designer Textiles bought furnishing business Mollers Textiles during the financial year, for which goodwill was $397,000.

That non-cash charge, and an additional special depreciation write-down of $1.18 million, would have reduced the net result to a loss of $121,000, he said.

The accelerated depreciation charge in the current year reduced plant carrying value, and future years' depreciation, by a similar amount, Mr Harding said.

A final dividend of 1c a share, fully imputed, will be paid on October 6, making a total dividend for the year of 2c, down from 3c last year.

Designer Textiles' share price closed down 2c at 26c.

- NZPA