Slow orders for fast food sink kitchenmaker

By Dita De Boni

A worldwide downturn for McDonald's Family Restaurants has meant financial problems for suppliers and the closing of at least one New Zealand company.

Broadway Industries yesterday announced an $8.1 million loss for the year to June 30 and signalled the closure of its Australasian food services division - suppliers of kitchens to McDonald's.

Chairman Ian Farrant said a downturn in the business of McDonald's worldwide had meant fewer new kitchen orders for the division and its closure in New Zealand.

He said the Australian arm of the division would also be closed while agents would represent Mercer's industrial and building products businesses.

Broadway reported an $8.1 million loss after tax for the year, compared with an $11.2 million loss in 1998. Sales dropped from $64.5 million to $57.7 million.

Only one division - photographic equipment company HE Perry - made gains in the year, boosting sales from $12.5 million to $13.9 million.

Mr Farrant would not disclose how many jobs would be lost from the closure of the division but said redundancies and closure costs covering both that business and the closure of plastics subsidiary Protech Products would amount to $4.5 million.

"The decline in the [food services] business had been happening for about three years, and I think we also waited too long for alternatives to replace the lost trade."

He said that despite the year's losses, all divisions had made gains in the past two months and the group's results would "bear the fruit of the company redesign" in the next 18 months.