Turnaround in Donaghys result

By Dita De Boni

Rope, cordage and textile makers Donaghys group has crept out of the Asian recession and back into the black..

The Christchurch-based company yesterday reported an after-tax profit of $4.09 million for the year ended June 30, compared with a loss of $5.93 million last year, on a 5 per cent increase in sales to $116.4 million from $110.8 million last June.

A final dividend of 3c brought the year's total dividend to 8c, compared with 7c last year.

Group managing director Ross Callon said the restructuring the company had undergone last year, as well as an upturn in the economy, had helped to effect the turnaround.

The rationalisations, costing $7.63 million, included bringing some manufacturing back to South Island factories from Australia and laying off more than 100 staff.

It also prompted the company to reorganise into four separate divisions - Donaghys Industries, Sarlon, Fairydown and Great Outdoors - and concentrate on exports which now comprise about 60 per cent of total product.

Mr Callon said despite positive results, the costs of doing business in Australia as well as an under-developed retail market led to a flat performance in that country.

"We were coming off a low base last year, but we've generated strong results ahead of last year and hope to grow our markets, especially for export, even further."

Donaghys shares dropped 1c to close at 138c yesterday.