Ceramco Shareholders Look To Future With Bendon
Ceramco Shareholders Look To The Future With Bendon
Ceramco Corporation Limited's directors have outlined an ambitious strategy of aggressively growing Bendon's intimate apparel business through vigorous expansion into Australian and European markets.
The company's strategy was delivered to shareholders at today's [I June 2000] special meeting in Auckland, at which they voted to sell New Zealand China Clays Limited. As a result, Bendon is now the company's core business.
"Bendon has an incredible future ahead of it. We're targeting additional annual sales of around $50 million from Australia and Europe in three years time," said Ceramco chairman, Ian Parton.
"That's $20 million, or 25% growth in annual turnover from Australia and New Zealand, and from zero to $30 million in the UK. It will take Bendon's annual turnover to around $130 million in three years time.
"We're looking at good earnings growth over the same period. The potential is huge, particularly in Europe."
Bendon's design and marketing will be driven from New Zealand. Its manufacturing will be outsourced, primarily to Asian suppliers. This will. provide the benefits of flexibility and price competitiveness while ensuring maintenance of high standards of quality.
Ceramco will be renamed Bendon Group Limited, and will trade on the New Zealand Stock Exchange under that name from Wednesday 7 June.
Shareholders voted to sell New Zealand China Clays Limited to French industrial minerals company Mircal, a subsidiary of Imerys, for $41 million. The price was higher than the fair value range established by Deloitte Corporate Finance.
"The sale of New Zealand China Clays was a response to market conditions," Ian Parton said. "The business has become a small niche player in a market dominated by large, vertically integrated mineral processing companies. We had the opportunity to capitalise on their demand for quality raw materials and sold at an excellent price to unlock the company's value for shareholders."
They also voted in favour of a return of cash arrangement in which one in four ordinary shares will be cancelled and cash returned to shareholders. The directors stated that the Ceramco Group will be liquidated over the next 18 months to two years, and more cash will be repaid in the most tax efficient manner.
The value of the cancelled shares will be $1.59 each, which was the share price on the day the announcement of the capital repayment.
Meanwhile, Ceramco has posted an excellent result for the year to march 31 2000, the third year in a row.
Both Bendon and New Zealand China Clays performed very strongly to record an operating profit on an earnings before interest, tax (EBIT) basis of $10.261 million; an increase of $3.912 million on last year - a rise of 61.6%. Bendon's EBIT rose by 53%.
Revenue rose for Bendon to $77.859 million from $73.722 million, a rise of 5.6%, and for New Zealand China Clays to $15.468 million from $12.674 million, a rise of 22%.
"We're very pleased with what are excellent results. They are a testament to the strong management disciplines and the talent of the management teams we have in place in both businesses," Mr Parton said.