High costs a blot on drycleaner's bottom line

Restructuring, high labour costs and rising energy prices have muddied the balance sheet of drycleaning company Taylors.

The company's revenue for the year to June 30 rose to $67.9 million, up 3.6 per cent on the year before.

However, high costs eroded its net profit by 9.3 per cent to $3.6 million.

Taylors shares, listed on the NZX, yesterday closed down 5c to $1.70.

Company secretary James Hill said the profit fall came after several years of declining gains but Taylors was looking to improve margins in the next year through increased efficiencies.

Taylors expected improved results from moving its Rotorua processing to Hamilton, just before year end.

Proposed investment in technology and improving productivity could provide more savings.

Hill said: "That's really about getting the benefits of scale.

"It's better technology, better use of energy, recycling of water, more efficient heat retention.

"Obviously, the plants use a lot of heat for drying and ironing of product - if you improve your heat retention, then you're using less energy for the same output."

Energy costs had increased 10 per cent in the current period, on top of increases over the past 18 months already advised to shareholders.

Increased sales to the healthcare industry were offset by lower demand in the hospitality area.

Negotiations over linen supply contracts with the three Auckland district health boards was ongoing but Taylors was not able to indicate likely outcomes.

Hill said: "The general linen service for the boards is about $11 million to $12 million a year - that's with the three Auckland health boards."