Higher Profit despite Depression

Higher Profit despite Depression Hansavivek JAY ENGINEERING, maker of sewing machines, fans, FHP motors, pumps, eastings, and die grinders, complains that its current operations are under pressure of the deepening recession in demand and at the continuing escalation of manufacturing and marketing costs. During 1974-75, operations of Jay Engineering's sewing-machine unit was substantially better than in the previous year, because the company was able largely to adjust selling prices to the cost escalations. Demand for sewing- machines, however, continues to be affected by the depression in the consumer durables market, Operations of the fan units too were seriously affected by the reduced government purchases, the generally depressed market conditions, and the increasing competition from small-scale manufacturers. The Sri Lanka affiliate's operations were normal, notwithstanding the difficult economic situation there. The deterioration in Jay Engineering's margins is reflected in the bare 13 per cent rise in gross profit, on net sales which were 52 per cent higher than in the previous year. Equity dividend has been once again skipped.