Costs Hold Memtec To 6pc Rise
Sydney Morning Herald
Friday September 28, 1990
Filtration specialist Memtec was held to a 6 per cent lift in group net profit to $11.16 million because of major marketing and management costs and downtime in US manufacturing plants.
Memtec failed to make its target of $100 million turnover because of the higher Australian dollar, chairman Mr Denis Hanley said.
Nevertheless, the 29 per cent boost in group sales to $92 million was a"significant success".
European profits were hurt by the poor performance of the acquired cord business before Memtec installed new management in January.
Interest costs more than doubled to $421,000, while depreciation was $2.42 million against $1.33 million previously.
Final dividend is 2c a share unfranked, making a steady 3c total.
During the period Memtec incurred considerable costs both locally and overseas in building up its plant and marketing capacity, and has yet to reap the benefits.
The company also consolidated Memtec America, lifting its stake to 97 per cent, and is looking to lift its holding in Memtec Europe from the present 47 per cent.
Mr Hanley said operating results were expected to increase significantly in the 1990-91 year because of tax benefits generated as the group's international businesses moved to profitability.
Major investments in marketing, research and general management should also provide significant returns in 1991 and beyond.
© 1990 Sydney Morning Herald