Taylors makes $1.4M

By Phil Boeyen, ShareChat Business News Editor

Monday 19th February 2001

The health sector continues to offer growth potential for listed linen-hire company Taylors (NZSE: TAY), which has reported a slight increase in half-year profit.

For the six months to the end of December Taylors made $1.385 million, up from $1.316 million in the same period the previous year. A three cents per share dividend has been recommended.

The company says its increased profit is on the back of an 8.8% increase in operating revenue, which rose to $21.4 million.

Year to date operating profit after taxation attributable to members was 5.2% above the prior period result at $1.4m.

Health sector operating profit grew 15.8% to $2.8 million, helped by productivity improvements at the Auckland plant. Overall in the year to date sales in the health sector have increased 13.1% to nearly $13.5 million.

Taylors says the industrial sector has also shown an improvement of 13.7% with half-year sales of $1 million, and it is continuing to investigate opportunities to develop operations in this market.

However the accommodation sector has remained static with sales at $6.5 million, and operating profits have fallen 47% to $200,000.

"This is partly due to the comparison being to a particularly strong first half in 2000 with large events boosting the Auckland business, however poor performances elsewhere in the country remain of concern," the company says.

In August the company ceased its laundry operation in Timaru, which it says will reduce sales in the accommodation sector but will save $130,000 a year and have a positive net impact.

The directors believe that trading patterns through the balance of the financial year will remain unchanged, and expect a full year improvement on last year's full year profit of $2.3 million.

Taylors is majority owned by food and cleaning firm Spotless Services (NZ) Ltd, a subsidiary of the Australian-listed company of the same name. Last year Spotless Services turnover in New Zealand was A$182 million.

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