Financial Reviews WELL WORTHY OF SUPPORT

NZ Truth, Issue 1177, 21 June 1928, Page 17

Financial Reviews WELL WORTHY OF SUPPORT

Shares and Debentures of Auckland Laundry, Limited PROSPECTUS IS BRIEF— VET LUCID (By "Fiat Lux") ' The public flotation of a laundry business is so unusual that investors might not be prepared to consider investing m the ordinary shares of such a venture. THE Auckland Laundry, Limited, is available and wants an immediate retherefore offering 8 per cent mort- turn upon. the whole amount, gage debentures concurrently with Then again, small • investors, i.e., its shares £50 to £500, do not find it convenient "Fiat Lux" has carefully exam- always to have money available to SJ!? *&aZS?f"£ith ' the proVisions of this flota?.cts of Thl concern P «on, the whole liability can immediate- ...... ly be discharged. Incidentally, the prospectus itself is It is a point w hich is much apprea cleverly conceived piece of work and ciated by many investors and could for lucidity and brevity it would be with advantage be copied by other difficult to improve upon. flotations j The manner m which intending m- Reverting to- the share issue, the vestors have been left to settle the first point tQ which this critic takes question of the probable size of divi- exception is the arra n & ement whereby dends is simply masterly. £5000 shares are to be held m reserve, I Provided the new premises, which it gubject tQ the rJ ht Qf application anfl is intended to build and equip, are run issue • h provisional dire ctors anything like as well as this prospec- nominees for twelve months tvs is drawn up [.then even the most registration of the optimistic shareholders are not likely „-.__„_,, to be disappointed m their returns com Panyfrom this concern. Exactly why the provisional The company is being formed to ac- directors should be placed m such quire the business of the Auckland an advantageous position, "Fiat Steam Laundry Co., Limited. Lux" does not pretend to underIt has to be observed that the new stand, but the effect is simply this. ! company's title is different from the old _. „ „ ... „ only m- that the word "Steam" is miss- X all goes well with the company j ng . and the business prospers, these shares Originally, the word "steam" was m- can be taken up by the provisional Itroduced into the titles of laundry directors, but if things go wrongcompanies which operated by steam- well, the shares just remain m ret driven machinery, as opposed to serve and that's the end of it. those (even then) old-fashioned con- Tt is J ust a case of "Heads I win, |cerns which employed small armies of tails you lose," and. does not seem to women to wash clothes by hand. be cricket. To-day, of course, hand laundries Perhaps this arrangement has been are practically as extinct as the moa, made with a view to rewarding the except m equatorial native areas, provisional directors for their efforts where the white man's tropjcal suits m assisting m the flotation, since the are still beaten to pieces on the flat prospectus does not disclose any other "washing rocks" of the village stream, reward and they are paying m cash It is stated that ; for the shares they the vendor company take UPwas originally es- r%. . _* j-\ 1 If this is the case, tablished over [JtmCWrS HeWaM ' lt certainly puts . a twenty-five years +LSll\*malViO X \K,LUUIU, somewhat different a g 0 complexion on the . A very Imposing matter, since their list is supplied of its principal and reward then becomes entirely continregular customers, including the lead- gent upon the first year's progress of ing hotels, clubs incorporated and pub- the concern. lie bodies, and institutions of the It means that to get compensation 'Queen City. for their flotation services, they must It can be inferred from this alone see that the company prospers from that the new company will start out m the outset: . . business on a profitable basis from Even if this is the explanation, it is, the day it takes over. m the opinion of this writer, quite unAlthough the business has been con- satisfactory, ducted by the present management for The laborer is surely worthy of his the past five years and the annual hire— and if these gentlemen have renturnover is given as approximately dered service to the concern, they cer£ls,ooo per annum, no certified state- thinly, deserve to be paid, either m ment of profits is given, but merely cash or preferably m paid-up shares, the bald statement that "the profits The idea that directors should act earned have been satisfactory" is sub- with little or no payment is altogether mitted to intending investors. too prevalent these days more parNow, the new concern is being re- ticularly so if one will study the registered with a share capital of £30,- sponsibilities and duties of directors 000 and is' simultaneously floating an as set out m the Companies Act. 8 per cent, mortgage debenture loan of .Auditors, also seem to be treated £25,000, debenture tax thereon being with scant consider^^X^.° t l°J iion mvnhlp by the holders to. their duties and responsibilities. P O? Ke £BMO > share capital, £5000 Regarding the plans; and Wosals is to be reserved and is subject to of. t^e new concern it .is^ intended right of application and issue at par to \° *** ° "t^ 3 fJ^'L S the provisional directors or their nomi- the business of the Auckland Steam nees for twelve months from date of a "" d 0 r ft y Co " Ltd " for the SUm o1 registration of the company. m." '«_,„*_, *„ v* «/.«.. ..vwi /.m.Q.c.. Of the remaining £25,000 of shades, The ass « ts to be acquired consist £1600 have been subscribed for by the 2 nly J 1 * I^^™??; w n n Jr^ nf ..._,_...<.......... +„ ♦_.._ ™._.™.... ..„~. rJp „_, has been valued by Mr. Hansard, ot signatories tc .the memorandum of as- d c m t £10ill6i sociation, £6000 are to be issued as d t _ be , d order and fully paid-up to the vendor company condition| plus the bus i nesa as a going and £17,400 are now available to the £ oncern publio at 2/6 on application, 2/6 on Noth ing is being paid -for goodwill allotment and the l..._ance m calls of and the purc hase price is to be satisnot more than 5/- each at intervals of fled by a payme nt of £4000 In cash not less than thi cc months. and £6000 m fully paid-up shares, tv j> oc ftfin __ o _. a. which will bfe treated as deferreds— . The £25,000 of 8 per cent, mort- , <e#f they shall not be entitled to any gage debenture stock is being is- dividend m any year until 8 per cent, sued on similar easy terms, i.e., shall have been pa ja on the ordinary 2/6 on application and 2/6 on al- shares for that period. lotment, the balance m ca Is on „. 0 . . , .„ 5 j _.^«,__ ._>r. m o -■_. ck_» ™ „..__„ After 8 per cent, has been paid same terms as snare money. _ „ __..j. ___...:,_«. <«- 4.v..____ <_„.__ on the ordinaries tor three conA very excellent provision has been secutive years, the deferreds shall made regarding both share and deben- thereafter be classed m all reture money— that is, successful ap- spects as ordinary shares, plicants may pay up. m full when, the As an indication of the old shareshares or deben- holders' faith m the tures are allotted; new venture, this m the case of the %JF 1 I~_ .7 7. is a s P lendid P ro_ debentures, the Modem MUtLdtnff vision and should amount paid up 2KIC/UCf/I jUUUUUIg have the desired carries the full rate result of instilling of interest from the — ~~ confidence into podate the company receives the money, tential investors. In the case of shares, where the ap- The next step the new concern proplicant pays up m full, he will receive poses to take is to purchase for £2600 interest thereon upon so much of his the freehold of 1% acres of land at money as remains paid up m advance. Grey Lynn and to erect thereon — at Thus he pays up £ 1 per share man estimated cost of £ 15,000 — a modern full with his application. . fire-proof building, with a floor space Application and allotment money of 30,000 square feet, being due forthwith, the necessary 5/- It is then intended to remove the is deducted, leaving him a credit of present plant from Belgium Street to i^, i o the new building, at the same time .n.__ -..._.-■ non nf k/- i-a. flu*, three installing additional plant, estimated mo T ntL fi hlcf hefeforl he'^s^reS to cost £12 000, and to provide a fleet with three months' interest ox i 15/. J^^affi^nHll^lSvS Then his second call Is due three * p ■ Auckland> months after that, so he gets three Agsumln that the capital of the months-i nterest on 10/- per share and qM company was £10i ooo and its turnthen a final three months interest on over _ upon which satisfactory profits the final call money. were being ma de— was £15,000, the It should be noted that whilst the ne^ compan y ( wjt h share and deben. debentures paid up m full carry 8 per ture capital of £50,000, would need to cent, interest, call moneys paid m. ad- i ncrea se the turnover to £75,000 to vance are entitled to 6 per cent, as set ma ] { c a similar rate of profit, out m the prospectus. The question for the share investor This provision of interest from date ig: »c a n this be done m Auckland of payment of either debenture or C ity?" To which "Fiat Lux" unhesishare money is a very proper one and tatingly replies: "Yes." is particularly attractive to a small in-, , A dequate capital, first-class modern vestor who has the whole of the money plant properly laid out, energetic, enterprising and efficient management —

and, above all, high-class service to customers — will create and retain tha^ volume of trade necessary, to make this venture a really profitable investment.' "Fiat Lux" is of opinion that all these factors have been given proper consideration m the prospectus. Both the shares and the debentures are well worthy of support by investors, large and small. When "the new plans are completed the debenture-holders will have security amounting to over £39,000 for the advance of £25,000.