A RECORD YEAR.

Dominion, Volume 6, Issue 1848, 6 September 1913, Page 2

A RECORD YEAR.

9 WELLINGTON WOOLLEN CO. LIVELY ANNUAL MEETING. A SHAREHOLDER'S CRITICISM. Tho thirtieth annual meeting of the Wellington Wool lon Company was held in tho Chamber of Commerce at noon yesterday, Sir. W. H. P. Barbor (chair- • man of direotors) presiding. Thoro wero. present a representative) gathering of shareholders. In moving tho • adoption of tho report and balance-sheet , (which has already been published), tho L chairman said:—Twelve months ago, 1. when last I had tho privilege of addrcssi ing you, I was ablo to say that the sales for tho yoar under review had been a Tocord for the company, and today I am pleased to be able to repeat tho statement, as applying to tho past year. _ Tho turnovor for tho financial period just onded has been easily a record in tho company's history, and it is pleasing to the directors that the resultant profit enables them to recom--1 mend an increasod dividend of 1 per cent., making the rate 8 per cent. It . is some nino j'oars since wo paid an equal dividend, but having onco more, 1 through stages of 5, 6, and 7 per cent., reached that position tho directors liopo to_ bo ablo to hold it, as in an industrial concern with the risks involved it cannot be said that 8 por cent, is ■ am exoessive return on tho shareholders' capital. Tho produots of tho company continue to find increasod favour, being ; iu firm demand', but the scarcity of suitable workers, so often referred to, [ makes it difficult to expand tho manufacturing capacity so quickly as wo should Eke to secure tho trado offering, and also to obtain the fullest benefit from our sales' organisation. Efforts in that direotion constantly cngago the attention of your board, and progress is undoubtedly being made, 'although not (as already mentioned) so rapidly as might he. As tho report now before 1 you states, there is being added at Petono a now hosiery mill from which increased output of a class of goods . that ,we'find a ready salo for is expected. Tlnis department has been gradually growing until now moro room for its economioal and bettor working is urgently wanted. Another building, tho want of which has been a considerable drawback, is a wool storo of suitable dimensions to replace tho old building ( now fallen "below tho requirements ot that important branch! of our operations—tho storing and sorting of our wool. These buildings will bo occupied very 6hortfly. The present wool store will bo converted into comfortable diningrooms for tho work peoplo and a general store-room. Tlia board recognises tho value of "welfare work" by making tho conditions of labour as attractive as possible, and with tho extra accommodation soon to be available at tho mill at Petono they hope to give tho employees there privileges equal to those already obtaining at the company's town workrooms. Reverting to the balance-sheet, it will bo seen, and as is mentioned in tho report tho roservo has been increased by £2000. The indebtedness' is higher; but on the assets sido this increaso is to within !(, few pounds represented by additional stock. This stock incrcaso is mado up by wool, stores, andf tailors' trimmings, all bought goods, wliich at to-day's prices aro of greater value than that set against them. Dealing with tho stock, it being tho crux of the position, I have to say 'that the prices have' been carefully scrutinised and checked, and that the directors aro quite satisfied as to tho value of that, th 9 most important item of the balance-sheet. Tho plant has been added to by £3707, the buildings by £6329, and depreciation of £5000 written off. Sundry and bills under discount show a reduction which, in view of the large turnover, is a satisfactory feature. Ample provision has been made for contingent losses, and I am gratified to say that the' percentage of actual losses is exceptionally small. By the profit and loss statement you will see disbursements show a . very small incrcaso. This increaso, I am sorry to say, may bo swollen in the current year, as the Minister of Financc is introducing an amendment of tho Inoome Tax Act, under which industries suoh as this, earning a minimum ol £2400 a year,' will have to pay oneseventh in tho £ more incomo tax. A deputation to tho Minister pointed oul many unequal phases of tho proposals I think there should bo some difference mado between companies with a larg< share list distributing but a small divl dond on their capital and tlioße corpora' tions with few shareholders and smal capital paying largo dividends. Tho nov proposals of tho Government aro mucl against tho small shareholder." After expressing the thanks of th< directors to the staff for its zealous ef forts, Mr. Barber formally moved tin adoption of tho report and balance-sheet ■ which carries with it a dividend at th< rato of 8 per cent, on both issues o: shares. : Tho motion was seconded by Mr. F Dyer. A Breeze. Mr. A. Warburton, referring to th< balance-sheet, remarked on tho need o ' a Government auditor investigating tin accounts of public companies, as such : system would givo independence to thos< companies whidh were entirely, in thi hands of tho directors. Ho could, h< said, givo an instanco of a' few yoari ago of a .company not far away fron where ho stood about whoso affairs then was a scandal Cries: "Point of orderl" "Orderl" The chairman: If you wish to continu< you must confiuo your romarks to th( report and balance-sheet I Mr. Warburton then wept on to refoi to tho value of the stock on hanc being'larger than ever it had beer since tho -inception of the company, £101,320, and was understood to state that discontent had been caused at the mill by tho machinery, on one occasion, being absolutely stopped on the motion of Mr. Foster—(Mr. Foster: "This is news to me.")—and that tho hands had formed a union for their own protection. Ho noted that tho amount duo bv sundry debtors ha,d decreased, whicli indicated a shrinkago in trade. (Laughter.) From the increased valuo of the stock ho would expect a recovery next year, and tho, balance-sheet would show a better position. Ho would be disappointed if it did not. As regards tho reserve fund, it was very satisfactory to seo the sum' of £2000 added to it. At least 5J- por cent., and any unusual profit, should bo added to that fund until it was sound. Ho noticed that tho sum for depreciation against finished goods had disappeared altogether. He mentioned tlio profit for tho year, and after detailing how simple a matter it was to make "paper" profits thought that the chairman might' givo them some ideal how ho made up his profit. Ho would also like to know if the company had gone iu for tho sale of imported goods. No mention was ever made in tho chairman's speeches of the railway siding—what it cost and what the animal cost was. The company's overdraft was £19,800 ill 1910; it was £48.769 to-day, and this was how lie analysed it—present overdraft, £'18,7G9; dividend (out of overdraft), £5767; his own estimate of the cost of tlie new storo at Petono, £4000; total indebtedness, £58,536. (Laughter.) With that heavy indebtedness they had to meet the wool season, when between £20,000 and £30,000 would be required for the purchase of wool, so thr.t calls would have to be made. (Laughter and foot-shuffling.) He had in his mind an amalgamation with tho Kaiapoi Woollen Company, by which arrangement tho shareholders of both comqanioa would

reap bigger dividends by a reduction in staff, reduced building account, and loss to pay in directors' fees. (Louder fooUshu/l'ling.) Tbo real manager of tho company, said Mr. Warburton, was Mr. W. G. Foster, and they should do somothing for him other than-thanking tho shareholders of tho Meat • Export Company for the services of so liiglilypaid Cries of "Order! Order I" The chairman: "You have no right to makosuch remarks —no right whatever. If you cannot confine yourself strictly to tho balance-slieot, I must ask you to resume your seat!" Mr. W-iu'tmrkm. resuming qui to unpertumbeil, said tliat a strong' effort should be made bo get an able softgoodsman to control tiho whole business. He w,u3 sure that such an appointment would mean a successful year and higher dividends. Thoroughly Sound.—Prospeots Bright. Mr. D. I'. Stuart took some exception to the tone .of Mr. Warburtcm's remarks. Ho (Sir. Stuart) was well pleased' with the company, arid he went on to refer to tho large hse in fihe price of shares as an indication of its improving condition. " He congratulated not only tJw direotors but has fellowsharelioldors. J[r. Frank' Ifyer said tHiat l it was rather peculiar, that Mr. Warburton should have selected tho company's rociord year for lies attack on the management : nnd directors. If Mr. Warburton did rjofc approve of the auditors, and tho manager, and the directors, why did he , not sell his'shares? The chairman state® that ever since Mr. "Warburton had been defeated fox. a seat oi} tho directorate lie had. mad'e statements hostile to tho direotors and tho company—istatoments which, if given' any credence, would 5)0 Jsghly prejudicial to tho interests of the company. The balance-sheet and report wore tangible evidence of tho position of tho company. Ho had given Mr. Warburton exceptional latitude. It was now foujr years sine© Mr. Warburton lost Ibis ,seat on the board, and oacli year since ho had regularly forecasted disaster. Yet for tho four years' when •bo was director tho company had: paid one 5 and threo 6 per cent, dividends, and silica then it had paid ilhreo 6 per cent, and recommended; ono 8 per cent. dividends 1 . The company was' in a thoroughly sound position, and tho • prospects were the very best. Mr. Warburton had referred to a stoppage of machinery owing to something Mr. Foster had done. He did not knew anything about it. They had kept tho machinery going and met with a good demand for alTgoods. His (Mr. Warburton's) reference to tho weavers only having been employed on certain days of tho week was utter noiisenso. Tho statement that tho value of the stock (£101,000) was higher than over was incorrect. It reached as high as £109,000 when Mr. Warburton was a director. The statement that the reduction of the amount owing by sundry dobtors meant a shrinkage .in trado was equally nonsensical. It simply meant that moro were now able to pay cash instead of doing business on credit, which was a goodj thing for everyone. Mr. Warburton had stated that the directors wore dishonest. (Mr. Warburton: "No.") Well, ho had implied as much in his references to the stick and how false profits could be B'hown. As to the company's railway siding, on account of tho amount it saved in the transport of coal, tho directors were wise to get it. Thcro was no annual cost on tho siding. Fifty pounds a year was set aside against tho capital co9t, so that ill ten years the siding would have cost them nothing. With regard to tho pessimistic forocast mado by Mr. Warburton, that gentleman was tho holder of ton shares, ■on which £2 10s. each had been paid. Surely it would be better ■ for him to sell his interest. Ho could get"-'£3o or even moro for it in the room. Ho (Mr. Warburtou) knew that what ho had said was not correct in many respects. (Applause.) Mr. Warburton:.Thank you for your advice. Oji being put, tho motion to adopt tho report and balance-sheet was carried unanimously. „ Mossrs. W. H. P. Barber and W. G. Foster were re-elected directors without opposition, and Messrs. Komber and Hunt Were reappointed auditors at a feo of 75 guineas each. On the motion of Mr. Kebbell. seconded by Mr. Stuart, a voto of thanks was passed to the directors and staff of tho company. •