Jinaneial Reviews HIGHWAY TO SUCCESS

NZ Truth, Issue 1206, 10 January 1929, Page 2

Jinaneial Reviews HIGHWAY TO SUCCESS

North Auckland Land Development Corporation Limited THE YEAR'S fORK UNDER REVIEW (By "Fiat Lux") ' : f -' ' ■ II I I■■ I t _ III! |-"|||| _''| ''''"" ''"_*_|_|^__|__|_^l|_- ' '"■ 111 111 !'mM|IM-'-"lWMl|'m'^l The prospectus of the North Auckland Land Development Corporation Limited, was most favorably reviewed m these columns some months ago, and the issue of the first year's accounts disclosing a net profit of over 30 per cent, on paid-up capital, proves that such criticism was well founded.

THE primary objects of this corporation are really threefold; firstly there is the matter of profit on its shareholders' investment, secondly there is the matter of proving the soundness of the group settlement scheme for a certain class of people m New Zealand, and thirdly there is the matter of proving the productivity of North Auckland land, particularly for citrus and other semi-tropical fruits. That the corporation has abundantly achieved the first of its objects .adds strength to the belief that it will also carry to an entirely successful conclusion its two further primary objects. It has this, critic's sincere wishes for success m its most laudable undertaking. Some eighteen months ago the corporation secured the property of the late George Riddell, consisting of some 6817 acres situated at Keri Keri, Bay of Islands, 12 miles by launch from Russell. The property has a considerable frontage to the Keri Keri inlet and at the township there is" a wharf with suitable facilities for loading and un-

loading coastal scows. Of the area acquired the corporation is retaining 1600 acres of which it •■ is to

afforest 1000 acres; 200 acres are to be devoted to a citrus plantation, and 50 acres will be planted m passion fruit. The remaining area of 350 acres is to be set aside for conversion at a later date into "The Keri Keri Garden City." The 5217 acres remaining have been subdivided into areas of approximately 20 acres each upon which the foundations of a successful group settlement have already been laid. That is, a considerable number of these sections have already found purchasers — retired folk from overseas being prominent amongst the number. The corporation's plans include much more than merely selling the sections and pocketing the profits. They have m their employ highly skilled men who are available through the eorpoi*ation lo fence, plant and cultivate to production absentees' property. \&IJ this of course is done at the'purchaser's expense, but it is fair to assume that the corporation can do the work with its highly skilled labor and expert technical directiqi^it least as

cheaply as an unskilled settler from overseas. ' ,• Where the cost of the corporation doing the actual work is too heavy for the pocket of the purchaser .then the corporation will, through its experts, direct the settler's efforts to carry out the work personally. This very excellent service which the corporation places at the disposal of purchasers of its land makes its proposals very attractive indeed! Particularly is- this so to overseas people who desire to retire from active business a few years hence. Under the corporation's excellent scheme it is possible for such people whilst still being absentees from. New -Zealand, to have their holdings planted, cultivated and brought to the stage of production without them ever seeing the property. The high commercial standing of ths personnel of the directorate of the corporation (apart from more material considerations) is a sufficient guarantee that such • absentees will receive first-class service m return for their expenditure. .The report, of the managing director

(G. E. Alderton) upon this aspect of the corporation's activities is of particular m

terest not only J to prospective investors m, the corporation's shares, but also to prospective purchasers of the corporation's sections. Here it is: "The factor of this new [to New Zealand — "Fiat Lux"] land settlement scheme which immediately appealed to the overseas man was the offer to prepare, plant, cultivate and maintain for him his section, under guaranteed expert supervision and that he could take it over as a going concern at his convenience. - "The Northern climate and position were, of course, also essential factors. "Although reference, is made here to the corporation's immediate success, it should be recorded that the promoters were really three years intermittently 'broadcasting' overseas with this settlement idea. ' "Eventually, some British subjects, ■move or less condemned to live m the outer world, where climate and tile ordinary amenities of life are most uncongenial, came down to carefully view and inspect our settlement scheme, the climate, and the living conditions that obtain here. . ..[■'■> "Briefly stated, these visitors, who, apart from merely seeking "d; means of income.werq desirous to find a homeland where they could build and make their homes. "More than one of these visitors has said that Keri Keri to them is almost a liaVadise .because it has none, of the extremes or rigors of a; frozen winter or the scorching heat of a tropical sun.

Big Achievement

Climate A Factor

"To reside under the British flag, and have a restful home among flowers, fruits and beautiful trees, is the allappealing desire of these overseas people, and because they believe they have found <their land of promise at Keri Keri, migration from the East has been secured for our settlement unmistakably. "These people have adequate capital to develop their holdings and will be an acquisition to the Dominion. "Already close on fifty sections have been taken up by overseas people, and orders for sections continue to come m.. There is every indication that the demand this second year will be much larger than the first year. "During the year our staff were very busy preparing the ground and planting some 12,500 citrus trees, the same number of passion fruit and about twelve miles of shelter belts. Several dwellings have been erected, some of a fine type costing .up to £2600 and others are being arranged for." * This critic believes that the fact of the corporation disposing of almost a fifth of its sections m the first year, of

operations . augm*s well for the early completion of the sate of the remainder of the sections. When this is an accomplish-

Ed fact it will make everything con-, nected with the administration of the settlement much easier and more economical for everyone concerned.. Coming to the corporation's published accounts for its first year of business which ended on September 30 last and which were, issued late m November, the disclosed net profit for the period was £5701, subject however, to income-tax. This is estimated to amount to £1200, thus leaving a balance available for distribution of £4501, which is £978 m excess of the net profit estimated m the prospectus for the first year of business. For a company of this kind to ' make any net profit at all m its first year of operations is surely a splendid achievement. To net 24/2 per cent, thereon must surely create a record. The bulk of the earnings arose of course from land sales which contributed £9727 of the gross earnings of £9980; interest £168; potato account £43 .jmd supervision £40 being the other principal items of income.

The expenses' amounted to £4279, the mum iiems being interest \£1221, winch is clearly only a portion of the aniount paid, the balance evidently Having been capitalized probably m prelilninary expenses account, which m the balance-sheet has been added to the property account. If this treatment has been accqrclod this item the writer most emphatically disapproves. If It has hot, then' what has happened to the remainder of the interest paid away, since the mortgage of £46,161 at 5 per cent calls for £2305 interest per annum and interest received from purchasers is credited m the profit and loss account.. The only other explanation is that purchasers of sections have individually taken over their property with a specific mortgage thereon, such being credited m reduction of the principal mortgage. The interest no doubt has been paid direct to the Public Trustee. Tfie next item of moment is that of salaries which total £1037 and the item is followed by advertising and commission £884. All other expenditure, is carefully classified and brings the tot'il up to

£4279, leaving a net profit of £5701 'to the credit of the appropriation • account out of which

I income-tax has to •be paid. Oh the face of the balance-sheet the subscribed capital is altogether too meagre and perhaps, bearing this 1 m mind, the directors very wisely refrained from recommending the payment of a dividend for the year, preferring 1 to keep the profit m the business. Coming 1 to the balance-sheet it is evident the corporation could profitably use considerably more' capital than is at present m the business and thjs writer is of opinion that every effort should be made during the current year to remedy this defect. Otherwise there would appear to be a probability of the corporation's activities being seriously curtailed. Judged by the results for the first year 'of .business "Fiat Xiux" considers the corporation has done exceedingly well and it is to be hoped that the success attained will be exceeded during the current year. 'It is an ambitious ahd laudable ; undertaking:' which certainly' merits the highest measure of success. '

THE NORTH AUCKLAND LAND DEVELOPMENT CORPORATION LTD. Condensed Balance-Sheet, September 30, 1928. LIABILITIES ASSETS' • ' £ ' ■ £ Capital paid ■ up 18,279 Property account 54,231 Profit and loss v . . . 5,701 Development account 2,029 Plant, ' etc 121 £23,980 Purchasers \. 14,078 Public Trustee 46,152 Cash ...' 760 Creditors ...; 345 Advances for planting • 402 Citrus trees account 346 ' I £71,225 £71,225