The company would move further into weaving and also help to make it easier for textile producers to become exporters, chairman Cliff Heath told the annual meeting in Milton.
The meeting was held at WEL’s Bruce Woollen Mill factory. It is a half-owner of the property, and owns 74% of the Bruce woollen business.
Plans were to better utilise the existing buildings to boost industrial output and then develop the vacant land.
WEL bought into the property to secure its tenure there, but also because the price was below registered valuation and offered a good return on capital, Heath said.
The company has also set up a smaller weaving business in Palmerston North, using some assets bought from the receiver of South Canterbury Textiles in Timaru.
As reported, WEL made a loss of $1.42 million in the year ended June 30. At balance date it had shareholders funds of $2.4m and net cash of $1.4m.
The major asset now is the $300m in tax credits inherited from the Disco entity, Heath told the annual meeting. The benefit had been confirmed by Inland Revenue, but to retain the credits the company needed to retain a continuity of current shareholders – mainly about 9400 sheep farmers or former farmers – and could not issue significant numbers of new shares.
WEL wrote down the value of marketing programmes in the United States, the Just Shorn carpet stocks by 100% and the Romney Rugs joint venture rugs by 50%. It was still possible that sales could recover group costs.
WEL is now based in the Bruce Woollen Mill office in Milton, having moved the registered office from Christchurch.
This has resulted in the resignation of the general manger and company secretary Keith Cowan, who had been employed on contract for the last 2½ years.
“It was all done in the best interests of the company,’’ Cowan said. “Milton is the operating base for the business, we needed someone down there and I didn’t want to move.’’
WEL has appointed Louise Billinghurst as company secretary in Milton, but would not be appointing a general manager in the short term. It also has an operations manager, Lui Gundersen, in the Milton business.
