GISBORNE FREEZING WORKS.

Gisborne Times, Volume VIII, Issue 519, 4 September 1902, Page 3

GISBORNE FREEZING WORKS.

INTERESTING SPEECHES. • THE ENCOURAGING PROSPECTS. In tho course of his remarks at the mooting of shareholders of tho Gisborne Sheepfarmers Freezing Company, the Chairman (Mr DoLautour) said :—By the end of September wo hope to have our London roturns to hand, and thon the balance-sheet will bo submitted to the , auditors and circulated among the shareholders. In the ordinary course our annual meeting would be twelve months after our first meeting when you appointed your directors, but I think such a number being hero, you would wish to know something of what was going on, and to have an idea of what has been found possible to bo dono in your interests. I should like to say first that I think we are indebted very much to Mr Jonos and Mr Coleman for tho great caro they have taken of your interests, and it is to these two gentlemen very largely, acting under the advice of your Finance Committee, that the success of the last season is due. I find from the interim balance-sheet that Mr Coleman prepared for mo that tho balanco of approximate profit is L 3211. I think you will find that that, although it is not final, is a very safe return. For this reason: That the profit and loss account only credits tho company with tho bare advances against sheepskins and wool, pelts and tallow amounting in the whole to noarly LIO,OOO, and the advances aro advances that aro rnado in tho ordinary course of business ; advances made at a timo whon tho markot was still rising and we have the knowledge that our goods arrived at a time when the markets were still high, so I think wo may safely say that the excess wo shall receivo for tho advance made will be a sufficient sum to cover writing down equal to 11 percent. for the year on tho wholo cost of tho works and plant. Of courso wo arc to a certain extent at an experimental stago of the company, and it is not possible to say oxactly what amount overy year should bo written down, but we havo a term, with the renewal of 40 years, and I think

it will bo found that a sum of 2.J- por cent, on L 23,000, which your capital expenditure is at tho present timo, producing a sum of about L6OO a year, would be amplo to covor tho total extinction of value in your

lease, (iml the loss of your plant, etc., by the plant- becoming out of date. The position is that you have a profit for the year, estimated on very safe lines, of over £3200, and the contingent sums to accrue from your sales are sufficient to cover what any prudent business man would | write off for depreciation. Now, that does not quite give you an intelligent idea of the moneys that are available. Share - moneys contributed to company are £15,609; you have received from your mortgagee £IO,OOO, making a total of £25,699. Your buildings, machinery, and plant have cost you £28,816, leaving a balaneo of capital in hand unexpended of £IBSB. You have in your bills and book debts Lgrjd, you have products on hand unrealised, the best of your products, tongues, etc., 1.1292. i may say that tongues have been sold at an advance upo”i Mr Coleman’s figures by Mr Coderwall recently, and you have manufacturing goods amounting to £1125, which you won’t have to buy next season, so you have available, cash in hand, etc., £657-1. Y T our current liabilities are £1570, leaving available for expenditure £SOO-1. Though we are claiming our current balance as profit, our estimated profit is £3211. The amounts we have in onr bank or warehouse is £SOOO. That £SOOO is liable to some deductions. In the month of August wo were earning nothing, but wo have certain fixed expenses. The share of fixed oxpensos is £3OO for the month of August. That reduces our available assets to £470-1.

We have authorised improvements on the recommendation of Mr Jones to the valuo of .£I7OO. Of these improvements, /700 is available towards the expense of a certain engino, reducing the amount to £IOOO. but of that £IOOO wo have already paid, in the balance before you £250, so that we have only to write off £750, and that leaves a balance of £3950, after providing for all changes, except the engine, by Mr Jones. The directors had to consider this : Was it wiser to apply our profit to strengthening our plant, and providing for the absolute necessities of tho shareholders in this season and the next, or to divide tho profit in dividends ? Well, wo are not wholly agreed on the matter. It would be regrettable if ten directors selected by yourselves, having independent judgment and looking at things from different points of view, absolutely concurred on everything. It would mean that there was one strong mind dominating everything, and when you have tho men combined, and doing loyally their best in your interests, a littlo healthy difference is for the best. The opinion of the board was that it was wiser to strenghten the plant. First, that the turnover that might be expected this season would bo largo;' second, by strengthening the plant wo would be pro viding an adequate insurance from risk if, through any misadventure, tho only engine wo can roly upon broke down. As to your necessities, I may say that the shareholders roughly owe 600,000 sheep. I havo been trying to ascertain from practical men what turnover of fat stock 000,000 sheep would moan. 1 havo estimates that it meant a fourth; I have estimates that it meant a fifth; but I have adopted an estimate of a sixth, and it seems to me that shareholders owning 600,000 sheep will have 100,000 sheep a year that they have a right to expect this Company to handle for them. Then, on tho other hand, relying upon ono engine. Well, I have no doubt Mr Jones is correct, that in tho case of an accident he could hold his chamber with tho old Haslam, yet it is clear that ho could not so hold it and go on with tho freezing, aud wo are faced with this : That if we were to have an accident in the busy season, wo sboulde have to disappoint the shareholders whossheep at that time would be coming for ward. Now, I -would like tc say this : That tho directors have in no sense taken the view that in strengthening their plant they nro in tho least attempting to force business away from any other company. The idea would be an absurd one, and it has not entered our minds. We look at it broadly, that wo havo got to provide for our own shareholders. They are not bound to come to our w’orks, but if they do we have to provide for their full requirements, and standing in a district such as ours, which is as yet in its infancy, and in which tho stock must increaso in arithmetical progression in proportions few havo yet understood, it would be madness delaying strengthening tho plant that wo have, in the hope that we might pleaso the shareholders momentarily by dividing tho profits, which I do not think they have expected, We hope to have tho second ongino in position by tho end of November, in time to take its share of tho heavy pressure which will come in the later months of next year. I am confident, although I came into the Company knowing nothing, that you have done a very wise thing in forming this Company—(Hear, hear) —and that it is going to be one of the most successful institutions of tho kind in New Zealand. (Applause.) Mr W. D. Lysnar: There are two points 1 would like to draw shareholders’ attention to. That is, we have put through these works up to tho present 52,000 sheep, 1200 cattle, and 617 lambs. That represents 67,017 sheep wo havo put through in the season from March to tl o end of July. Our Chairman has told us ' that there is a clear profit of £3211. If you apportion that out it practically means that we have an extra profit of Is a head. There is a direct profit. This is, you remember, in addition to the fact that we havo already saved the shareholders Is in the freezing of tho sheep. You have been saved a shilling, there is also a shilling in tho profit, aud you are clearly 2s better off in the actual gain. Then there is this other phase of the question which ought to be borne in mind. Our present freezing capacity is only 750 a day. With the new machinery, we will get up to 1900 a day. At the 750 a day, if a _ man comes along and wants 10,000 quickly, although we might have the sheep, wo have got to wait a month to freeze them. It weighs very importantly with tho Home buyers if we can give them quick despatch. What has hampered them is to get them in the stores ahead of sellers. We want to be in a position to sell them first and freeze them afterwards, and freeze them quickly. This will warrant the directors in going in for the machinery, which will cost £6481, less £7OO, which is included in the work in hand. We are committing ourselves to an additional expenditure of £5781 to get our freezing power to 1900. We have £I9OO in cash towards that; we really have £3BSI to make up, and we have got a whole twelve months to find it. We have got 15 months in which to pay it. That is, allowing that we keep £2OOO in the bank for working expenses, and we must keep that. We have really committed the shareholders to £3BBI. With the prospect of the new year, with tho shortage in Australia, and South Africa being opened, we must have a good year. That is, without anything being called up from any of the present shareholders or ! any shareholders coming in. A vote of thanks being passed to the Chairman for his efforts on behalf of the Company, in reply, he said lie could not have attempted to proceed with the work of the Company, owing to his other engagements, if ho had not been assisted by Messrs Hall, Clark, and Lysnar, who had been ungrudging in their efforts,