Taylors fails to clean up but dividend the same

Geoff Ricketts

Cleaning company Taylors' December half-year net profit fell 34 per cent to $1.73 million.

Pre-tax profit fell 30 per cent to $2.6 million while operating revenue rose 2.8 per cent to $34.1 million.

An unchanged, fully imputed dividend of 6c a share will be paid on March 24.

Chairman Geoff Ricketts said sales in the hospitality market fell.

"Lower demand and the competitive environment in the South Island has resulted in reduced revenue and, correspondingly, reduced net earnings."

However, sales from healthcare and industrial customers increased.

Added value sales into the airline sector and the continuing growth in laundry management services to several healthcare customers contributed to this growth.

Ricketts said increases in transport costs, labour costs resulting from the changes to holiday and leave entitlements, and an increased depreciation charge flowing from capital investment had meant that higher sales did not translate into higher profits.

The company is on a drive to invest in plant to try to cut its costs.

Taylors is also re-tendering for an important laundry contract for the Auckland district health boards, which the company has held for 12 years.

Ricketts said the company was expecting an improved second-half result, "but not sufficiently strong to produce a higher full-year result than that achieved in 2005".

Taylors shares fell 5c to $1.65 yesterday, their lowest since June 2003.

They have traded between $1.65 and $2.75 in the last year.

- NZPA