FACING BIG LOSS

NZ Truth, Issue 1262, 6 February 1930, Page 19

FACING BIG LOSS

Financial Reviews

Canterbury Frozen Meat Company's Bad Year

SLUMP IN TRADING '■.'■.'■ ■ ' '•/ . 7 ' ■■' (By "Fiat Lux.") ,' ''

Tlie disastrous effect of losses incurred by the Canterbury Frozen Meat and Dairy Produce Co., Ltd., m trading during the past year is reflected m the company's annual accounts. .;'.-,. '/ The company is not alone m this respect, as most of the freezing concerns of the Dominion have experi-. enced an unfortunate year-. If this condition of affairs is likely to continue, it can only result m the weaker companies going to the wall.

■-.iiiiiiiiiiiiiiniiiiiiiiiiiiiniitiiiiiimiiiiiiHimiiiiiiiiiiiiiiimmmuiiiiiiiiiiiiiu THE profit and loss statement em-, bodied m this article discloses the minimum of . information, the shareholder having to be content with the item "By balance of accounts after deducting wages, working expenses, etc." What the term "etc." covers is left to the imagination. , As long as shareholders are content to receive accounts framed m such a meagre fashion, they will be bo furnished, unless an amendment is made In the Companies Act to provide for fuller details In published accounts. "With accounts issued m the present form shareholders have no means of

making a true comparison of one year with another. > It will be seen that after a period of steady profits approximately £21,000 per annum, the 1929 trading resulted m a disclosed loss of £48,422—a falling away of £70,425 as oompared with 1928. Luckily, the ' company was m the position of holding- substantial : reserves iand to meet the loss the directors transferred £56,000 from the general reserve account. A reduced dividend of 6 per cent, was paid on the ordinary shares as oompared -with 8 per cent, for the three previous years. .

j The shareholders' funds are decreased by £65,767 and the amount carried forward to next year is only. £642, as against a "carry forward!' m previous years'of over. £5000. The' liabilities which show an increase of £93,809 are grouped together and it' is impossible to say to what extent these include outside liabilities or internal adjustment accounts. As no bank account is shown m the balance-sheet presumably it is included m this liability. • On the assets side the fixed assets show little change. Sundry debtors show a substantial reduc-

tion of £25,243 and the interest m consignments, advances and stocks, which are all ■ grouped' together, show an increase of £52,311. Here again no useful comparison can be made. ■ ■' Unless a very substantial recovery can be made during 1 the current year, the outlook, , from a dividend point of view, does not appear to be too bright and there i is riot likely to be -much demand for the shares. [ The following comparative table indicates the trend of the trading results of t"Ee Canterbury company during the past five years: — j

,CAn£JE^BURY .FF^^N:M EAT A^D DAI RY PRODUCE CO., LTD. \ „~ ■ YLIABILITIES. Yvl^'-y-^ Capital paid-up 212,50,0...—-- Freezing .works, plant, General reserve fund 79.00i0t56.000 machinery, land, etc. 312,684 *974 Insurance reserve . . . 80,000 — Debtors 24,453 f25,243 Renewalsaridrepla.ee- Interest m unrealised ments, reserve .... . 3902 t2353 c o.n s i gnments, m Proflt and -loss; A/cV, 5892 t7414 eluding advances to /' -: .!* ■■■. '"■'■;■".-.' ■;■■'-■-'•.': . '— - -— — — — . • owners.of meat, etc., Total shareholders' ' • arid stock at works 480,011 *52,311 funds ...,.;.;::..•- 381/294 t65,767 War loan ..; 82,616. — Drafts against sliip- .>".■•■.■.•' ments and sundry - •' oreditors ...... i../ 518,470 *93,809 . £899,764 »28,042, ■ ' £899,764*28,042 Note: * Indicates increase and t decrease compared with 1928. .

PROFIT ANDI LOSS ACCOUNT. 1826 1926 1927 1928 A 1929 £££ ■ £ £ Net profit ....%.. 21,168 21,309 21,356 22,003 Loss 48,422 Transfer feeß „ 8 8 6 7 8 21,176 ., 21,317 21,362' 22,010 48,414 '•■"'■'. ■'''•''.',"■■ ' Amt. trans. y& '-'■ \ -y'""' •:■■<■■■■.'■-■'■'■< ..: from geh. To renewals Yres. fund. Reserve fund .« 5000 6000 6000 6000' 56,000 Dividends • ' . -.. Preference- ...-.-., 6% 6% * 6% 6% 6% Ordinary, .v.... • 10% 8% 8% 8% 6%