Financial Reviews £ GILT IN THE EDGE £

NZ Truth, Issue 1149, 8 December 1927, Page 17

Financial Reviews £ GILT IN THE EDGE £

Finance

Wellington Investment, Trustee and Agency Company, Limited SHARES A GOOD INVESTMENT

(By "Fiat Lux.") jrmmimimnnmmitmmitmmuHnimimiimmimnimmininnimmtMmmimmMiimm^ 9 j>iiiiiii>iiiiitiiiiifiMriiiitiiiiiiii<[iffuiniijir»itiiiJ>>iJ]iiiiitiniiiMiniiiiiiiJiiijiriii)iii!i!iiiiiii[|ii>iiMiiiiiiiniuiiiiiiiiiMiiitiitii!iii>iiiiii itiiiiniiiiiiiriuiiiiMiniimiiiiuMimiiiriiimiiiiiiiitiiinimiuiiuj

il ,THE forty-first annual report and balance-sheet of the Weill lington Investment, Trustee and Agency Company, Il Limited, discloses the net profit to be £5380, resulting m a fi 6% per cent, dividend for shareholders for the third year m |j succession. I jiuMMHiiinnnnMUiimminwmimnnnmiiifflminrammnmmmtiimiimniiimnmimnmniM •aimn niiimiirimiiimuiimiiiimnimiiimiiMmiitimiHiiiiiimiiiiiimiimii iuiiiiiiiiiiiiiiiiiiinitunmiiHinin>tiiuiiiiiiiMMiiiiuiiiinmiiiiinßnmniitmiiittiiiiiiiniiiiiiimitimiii>iiiuHiifraimih

INVESTORS who put their money 1 into concerns of this kind must not expect anything spectacular m the way of dividends or they will inevitably be disappointed. Absolute safety and security for investors 1 money Is the first consideration m such companies and this point must always be remembered. As a general rule In this Dominion concerns of this nature are as solid and substantial as the Public Trust Office and therefore a safe repository for the orphans and the widows' mite. It Is, however, a rule well established by experience that the rate of dividend payable by any ooncern Is usually m inverse ratio to the safety of its capital. If a concern is working something purely speculative such as an alleged

If a concern is worl purely speculative sucl gold reef, then speo- _ ulators look for and are fully entitled to a high rate of dividend since they stand very heavy

odds of losing all.

Per oontra, however, Investors ln gilt-edged securities and shores suoh as banking, insurance and financial oompanles, looal body and Government debentures, cannot reasonably expect high returns since they have almost irreproachable seourlty for their oapital.

The risk of loss of any portion of their funds is only a very remote contingency. Having thus set out the principles upon which a concern of this kind should be measured and having shown the great difference which exists between a gilt-edged investment concern and an ordinary trading company, some of the details of the Wellington Investment, Trustee and Agenoy Co., Ltd/s 1927 accounts can now be disoussed with due appreciation.

The company's authorized capital is well on towards the quarter of a million sterling mark — £200,000, divided into £1 shares of which £124,000 worth have been subscribed. The called-up and the paid-up capital at 10/- per share amounts to

[■totalling (626,932, of which £24,700 is a general reserve, the balance being reserves for specific purposes. Out of the profits of the year under review £1300 has been transferred to strengthen these accounts, £300 going: co the general account, bringing it to £25,000, and £1000 has gone into the reserve for depreciation of mortgages making the net balance of that account £1132. Reserve for depreciation of security £400 and reserve for income-tax £700 complete this item. Deposits and accrued Interest total £136,526, a diminution on the year of 1127, but an advanoe of over £10,000 compared with the figures of 1923.

This large amount of cash deposits made - by the publlo without any tangible security 1 a surely a tribut© to the high esteem ln which thlß oonoern ls held by investors and judging

'■■■■■' ■ ■ '-' entirely by the published aocounts such esteem is well deserved.

Coming to the matter of the company's assets, mortgages at £187,805 from the principal "stock-in-trade" and at this figure show the slight increase of £8412 for the period. Compared with the 1928 totals a rise Of over £10,000 has been made. Whilst, of course, it is neither politio nor practicable to indicate m the annual report the total amount of advances made upon different classes of security such as business premises, city residences, suburban residential property, dairy and pastoral lands all such statistical information will be available to the directors. From the omission to comment upon the values of these securities it must be concluded that they are m good order and of full face value. In this connection it is of more than passing interest to observe that m the past four years this company has written off out of reserves only £2900 for losses on mortgages.

Considering that the period, has been