THE NATIONAL TOBACCO COY., LTD.

Hokitika Guardian, 13 February 1926, Page 4

THE NATIONAL TOBACCO COY., LTD.

SECOND ANNUAL REPORT AND BALANCE-SHEET. BIG BUSINESS, BIG PROFITS, BIG DIVIDENDS. (By Cambist in the New Zealand Pictorial News).

“Nothing succeeds like .success;” Llmt short proverb might be used to aim up the short history of the above remarkable company. This national institution, for the company is more than a mere dividend-earning concern, has established the tobacco industry in the Dominion. Before it came into existence many and various efforts were made in the cultivation of tobacco, and just so many attempts weie directed to the preparation of the manufactured article, it is -needless to say that the outcome of these well-inten-

tioned attempts only resulted in disappointment to all concerned, and, at one time, it looked as it this country would never develop into a tobacco producer. From the time when Air Gerhard Husheer came upon the scene and took up what appeared to be a hopeless task, namely, the proper methods of tobacco cultivation and the manufacturing the cured leaf grown in this country, extraordinary progress has been made. To-day, owing to the great experience of that gentleman, his undoubted expert knowledge of

every branch of this business, bis splendid business qualities and sterling honest v, we have a fresh and valuable productive asset added to the Dominion’s economic outfit. 'I Fie National fobacco Co. Ltd., depends upon locally grown tobacco, mill, to get the needed supplies for its manufacturing purposes it has had to instruct and guide those farmers who undertook the cultivation of this beneficial “weed.” In every case where marketable tobacco lias been produced in this country, this lias been achieved under the expert instruction of the gentleman who is now the chairman of directors and manager of this company. The profits obtainable from tobacco growing are vastly greater than anything hitherto known by the man on the land. The labour required in lhe

cultivation of this plant is of the lightest description and extremely pleasant in its application. A few acres, propel*] v planted and tended, will return far more income than a larger area devoted to dairying, wool, meat or other crops. Above all of this, has to be noted the fact that tobacco is always in short supply, and, consequently there is usually only one chance <>l fluctuation in the market price of cured leaf, namely, a rise of a penny or two per pound, which is, of course, n, splendid situation for the anxious grower. This country thrills with worry over the price of wool, meat, butter, cheese, but in the case ol tobacco, there is nothing but pi oasuiable expectation on the part of the growers, and, in so far as actual results have been arrived at, the cheque for the goods has been of an opulent character. There is not space here for all that could ho written about tobaccogrowing in New Zealand, but the company reports that, for the past season, v*,*iiviic to tliei erower have

averaged again £SO per acre, and in some cases as much as £9O per acre.” It is this side to tobacco-growing which makes the industry so important to the Dominion, for it plenisb.es the worthy purses of the gardeners who work so willingly in the cultivated patches devoted to the growth of this valuable plant. The time is • not far distant when we shall see enormous acreages laid out in tobacco, and all of this will be properly laid to the initial acts of the promoter of the National Tobacco Co., ltd. The prim- ; ary and secondary aspects of the ease : are Kith in the hands of Afr Husheer, ; and how well ho lias succeeded can he i fairly gauged by the wonderful balancesheet, which is now reviewed in this column. The authorised capital of the company is £30,000 in £1 shares; 15,000 of these are 8 per cent, preference shares, and the balance is made up of ordinary shares. The company has only issued two balance-sheets, the first covering a period of twenty-two mouths, and the one now under notice showing a full period of twelve months only. These details are of importance to any ,person having an interested inquisition into the affairs of the concern ; they are also pertinent, when one comes to investigate the profit and loss accounts for the separate periods mentioned. The company has paid to its proprietors, over since it commenced business, 8 per cent, on its preference capital, and 12 per rent, t-.; tile ordinary shareholders. Both of these distributions are of e. highly satisfactory nature, and. later on in this review, some further comments will he proffered when dealing with the profit and loss account. At date of the second balance-sheet, the paid-, up capital is given as £28,73.3 as com- j pared with £l-1.737 in the first j balance-sheet. In the first balancesheet the company was burdened with 7 per cent. purchase debentures amounting to £21,00; these have all been redeemed and therefore do not appear as a liability in the second Aluminum t. Sundry creditors in the latter issue amount tu £991, while, for the initial period, the sum was £6BB. The total of assets in the first bal-ance-sheet came, to £19,606, and in the second balance-sheet they have grown to £36,060, thus showing the remarkable increase of £17,000 (luring a period

of twelve months. AA’itli such solid assets, the amount of trade liabilities (£991) appears as like a speck of dust upon the universe of cash. “Cambist” is unable to call to mind anything of equal merit in the whole history of New Zealand incorporated business enterprise. It is really a splendid performance and, therefore, praiseworthy from every point of view. Turning to the assets side .of the balance-sheet, and comparing the vari-

oils headings with those of the beginnings of the company, we get the following instructive movements, all of which are com mend aide, namely, porperty account £6913, increased to £8791 ; the depreciations written off

unai suicus oi raw leai anu manufactured tobacco have grown from £5371 to £12,368; advances account £663 has disappeared, and in its place the following new accounts arc in the 1925 balance-sheet—advance on mortgage £IOOO, advances on purchases £2095; sundry debtors (1924) £3578, now £5421 ; charges paid in advance £251 ns against £333; cash in bank £3546, anil in 1925 £5956. It will bo noticed that the business lias made remarknbe progress during the past twelve months and that all of the increases under the various headings have more than covered the advance of increased paid in capital. While the foregoing is very satisfactory oil the figures supplied, “Cambist,” knowing the sound business methods of the management, has every confidence in the valuations shown for stocks, properties ami book debts. In the case of stocks, it is his opinion that, in this line alone, the values are so conservative that a large future profit will result from their realisation. Stocks this year are £7OOO more than in the previous balance-sheet, lint the business has grown in a remarkable manner, consequent upon the splendid quality of the manufactured tobacco, and, what is better still, that high standard of quality is perceptibly improving at a rapid rate. The smoking public of the Dominion have found this to be the case; the orders for this tobacco are growing month by month; so that the sales department is estalslishiug fresh records in every period of the year, but, to he quite correct, it

is the sensible smoking public who are really putting up these records—they demand the various brands of tne National Tobacco Co. Ltd., because nothing else meets their requirements in price, quality and grateful satisfaction to the same extent. Then, again, tlie book debts are £I9OO more at this balance. Considering the fact that those are contracted with wealthy merchandising firms. this rapidly growing business is benefiting by the intermediary services of firms which pay promptly and secure full discounts. Taking that view of the situation, “Cambist” would not be surprised to find that the turnover is over £60,000 per annum. While (

the latter supposition appears to be reasonable and in keeping with, the prosperous initiation of this young company, there can be no doubt that there is ample room for much greater progress in the future. It is the desire of this candid writer to focus the attention of all patriotic smokers on the brands of this company; lie wishes on this occasion to inform them that every pipeful of these splendid tobaccos smoked in peaceful contemplation helps to make a local market for every leaf of tobacco grown in this

country. The man on the land who is producing this valuable raw product deserves most worthily that kind of practical support. This view of the situation is neither selfish nor narrow; it is as sensible and as compelling as the call of duty and rectitude imposes upon every worthy citizen in the Dominion. The man or woman who supports the New Zealand tobacco industry helps to build up new wealth, and the benefits of such a course reacts for the good of all. Let us never forget that foreign tobaccos are mostly produced by niggers or cheap slaves who are. after all, lmt pawns in the hands of combines or monopolies. The producers of the raw leaf in this country enable us to get a better smoke at a lower price than is the ease with imported and doped goods. Quality and satisfaction, cheapness combined with high value, patriotism blended with sound economic wisdom, these and many other good features are all bound up with the successful growing and manufacturing of New Zealand tobacco. The profit ami loss account is probably what interests shareholders in any company to the greatest extent. In' this case there are two dividends well and truly earned, namely, 8 per cent, oil the preference shares and I‘2 per cent, on the ordinary shares. In both cases this has been tlio happy results in the two balance sheets issued by this prosperous company. It has started well, and “lias never looked back ’’ The gross profits are £4OOO more tins venr. 'Hie company lias wiselv decided to build up a reserve fund'. and. to that. end. lias opened its first visible reserve fund at £3OOO. 'Flint operation is equal to 10 per cent, on a paid up capital of £30,000. A splc-ndid now factory and plant to the value of £IO,OOO lias slipped into the ownership of the shareholders, for which thev have not- paid one penny; it was all made and provided front the

profits ot tne nusincss m t-m. i llii- latter is a secret reserve to the extent of 33 and a third per cent on £39,000. Adding both together, the company lias in a period of 31 months built, up reserves amounting to over per cent of the invested capital in 3-1 months’ time. It would be waste of time and space to add anything m the way of comment to this wonderful achievement. The facts speak foi themselves. On these figures the shareholders are the owners of a. business cheap at £IOO,OOO. Let them, by every lawful means, keep it forever, and 'let them never forget their indebtedness fo the splendid management of Afr Husheer, and the honest board of directors who so ably assist him to carry out the sound business policies of this local company. and the magnificent assistance which, that gentleman has rendered to the man on the land who provokes the raw material that makes (be splendid manufactured article —New Zealandgrown tobacco.