ENGLISH ELECTRIC COY

Dominion, Volume 32, Issue 148, 18 March 1939, Page 14

ENGLISH ELECTRIC COY

Record Order Book

INCREASED PROFIT Mr. G. H. Nelson presided at the 20th annual general meeting of the English Electric Company Limited, held on February 21, in London. Dealing with the balance-sheet, he directed attention to the fact that the excess of liquid assets over current liabilities bad risen during the year from £1.942,826 to £2,157.074. The trading profit for the year, Mr. Nelson said, was £bbi,W3. being £llt>,4L. more than for the l? revlou mm predation had been increased by £lO,OOO to £63,500. The net profit for tjie year was £501,709, and adding to this the £54,287 brought forward from 1931, the available balance was £utw,9J6. lhe directors recommended that the balance of expenses of the debenture conversion, £70,554, be written oft, and that £200.000 be placed to general reserve.

The present order book was the largest the company bad yet had, but it would not be wise to overlook a factor to which reference was made in the director s report, namely, that the margin of profit was slightly lower at home and prices were very low abroad. Defence Work. Except during and just after the Great War the manufacture of armaments had never been an activity of the company or of its constituent companies. In the spring of 1938, however, the directors felt that circumstances had arisen which made it the duty of the company, as of every important engineering concern, within the limits of its possibilities, to place its accumulated experience and engineering organization at the disposal of the Government to help in the vital purpose of expediting the defence programme.

The company had since undertaken its full share of the work, including in particular the manufacture of air-frames on the lines announced in .the House of Commons by the Secretary of State for Air on November 10 last. The chairman mentioned the happy relations existing between the company and the defence departments, and stated that in the aircraft field a working arrangement with Handley Page Limited existed. Though the Dick Kerr Company, now incorporated in the English Electric Company, during and for a little time after the war was in the aircraft business, the present problems were quite new to the company, and be thanked all t,hose concerned, both in the Air Ministry aud in the Handley Page organization, for the help they had so willingly given. The general policy of the directors, so far as profit from defence work was concerned, Mr. Nelson continued, was to apply such profits in the first instance to further strengthening the company in the performance of its proper and normal functions, aud stockholders, therefore, should not look for increased dividends from this source:

The company must be ready to meet every demand that might be made on it by the extension of research and constant improvement of manufacturing facilities.

No appreciable ehniTges had taken place in the costs of labour and materials, aud the board was firmly convinced that stability was the only foundation for sound business and steady employment. The difficulties of business generally, and in particular of export business, could only be increased by an upward tendency of the costs of material or labour. The average price of plant invoiced by tl>e company in 1938, after making adjustments for variations in costs of materials, was about 13 per cent, below the price obtained in 1937; and the increased profit arose from a greater turnover. Overseas Business. Overseas business had caused a great .deal of anxiety, the chairman said. Owing to the depressed international position and difficulties as'to payment a large part of the world had to be excluded from the markets in which the company could operate. In what remained prices had fallen to a very low level. None the less, it was felt that a concern of the company’s standing in the international market was under an obligation to do everything in its power to preserve its proper proportion of such export trade as was available. The problem in many instances was not the normal business of competing witn whole resources of the Governments of foreign firms, but of competition with the the countries in which these foreign firms are situated. The Government recognises the difficulties of private firms in meeting such competition, and was endeavouring to improve the situation. The industry must, however, stand together against the foreigner, and if the problem was to be effectively dealt with they would have to co-operate, as in industry, with the full support of the Government.

Mr. Nelson mentioned that the company carried the whole of the cuts associated with its big overseas comprehensive contracts, though 60 per cent, of the costs of such contracts was paid to the suppliers of materials and services in Great Britain. In spite of all difficulties the company was still reserving the same percentage of its plant as before for export business. Important Orders. During the year they had manufactured or had in hand steam turbines of from 1000 to 50,000 K.W., operating at various steam pressures up to 12001 b. a 'square inch, at temperatures reaching 900 deg. Fahr. The turbine of which they were pioneers, namely, the 3000 K.W., 3000 revolutions a minute, was still a most efficient and popular maejiine.

They had orders for several very large pass-out and, back-pressure turbines for various parts of the world, and a special source of satisfaction was the number of repeat orders for steam turbines received during the year, which was a tribute to their reliability. There was still a special demand for apparatus for electric drives for steel mills, and substantial orders had been received for winding motors for gold mines and collieries, collieries.

lu spite of subsidized foreign competition the company was determined to have its proper share of hydro-electric installations, particularly in Die colonics aud Dominions, and substantial orders for such installations had been received, though at low’prices. Mr. Nelson said, that the demand for Diesel engines continued, and the company had received very favourable and appreciative comments on their reliability and low operating and maintenance *costs.

The company's design of patented arccontrol device stimulated the demand for their switch gear. The switchgear research and testing department was providing facilities for impulse testing up to 3,000,000 volts, and for breaking capacity tests up to 226-k.v., at powers higher than had yet been attained in this country. The large expenditure incurred by (he company in this connexion, with the further development, planned, would keep them in the forefront with this class of work.

Large orders had been received for electrical equipments for operating on suburban railway lines, electric locomotives, and also electrical apparatus for trolleybuses. Substantial orders bad also been received for rolling stock, railcars, shunting locomotives, and bus bodies. Mr. Nelson mentioned that the issue of ordinary shares, at par, to the existing ordinary stockholders, on the basis of one new share for each complete £3 of ordinary stock, would realise £480,060, which would finance in some measure tiie company’s growing volume of normal business.

In conclusion, the chairman paid a tribute to the whole of the company’s employees, both at home and abroad, for the efforts they had made toward producing satisfactory results, and mentioned tiie happy relations which existed between the management aud the employees.—P.B.A.