COMPANY PROGRESS

Otago Witness, Issue 4033, 30 June 1931, Page 11

COMPANY PROGRESS

GOLDSBROUGII MORT & COMPANY LIMITED.

One of the abnormal features of the past season was that..although the volume of business was well-maintained, and the number of bales handled was a record one, the net return, owing to the slump in prices, shows the lowest rate for many years. The net profit of £117,476 is equivalent to a return of 4.89 per cent, on the paid-up capital, and it is unfortunate that the shrinkage coincides with the first complete 12 months for which the increased capital ha» been in circulation. Io pay the 5 per cent, dividend as recommended requires £2524 in excess of the_ net profit,—a sum which, with the £2500 proposed to be transferred to provident funds, has to be met out of reserves. The shareholders’ portion continues to be regulated by the net surplus, which is down practically to onethird of that brought out two years ago. The interest bill ig a heavy one Debenture stock aggregating £1,418,702 supplies a substantial contribution towards . financing the company at relatively cheap rates —£838.235 claiming 4 per cent., and the balance 5 per cent. Deposits, with accrued interest, represent £348,364, while there is a further sum (unstated) due to bankers. there are interest obligations on mortgages of £44,800 to be met also, but after allowance for these, it would' appear that, out of a total of £65,900 entered for miscellaneous interest, the bulk has been paid to bankers, on an overdraft which averaged throughout the year a higher level than that outstanding at the closing date. Apart from the borrowed money and its charges, sundry creditors comprise virtually all the liabilities. As sundry creditors are reduced to £535,470, dr by nearly £300,000. it seems fair to assume that the indebtedness to the bank has participated in the genera) reduction. No further indication is given regarding their composition but their definition —amounts owing on open accounts —is comprehensive enough to cover general and special items. Provision for taxation is down o £46,239, but. with smaller profits, the taxation charges are less. There is little alteration in reserves. After being mulcted in the amount necessary to meet-the balance of dividend and transfer to provident fund, the aggregate is little under that of a year ago. The special funds, among which the general fund at £1.720.000 overshadows the others, come to £1,965,000. and, except the primary reserve of £lOO,OOO, which is represented by investments valued at £100,064, are employed in the business. The close relation they bear to the paid-up capital—equivalent to approximately 86 per cent. —makes their position strong, while the fact of their having been only slightly encroached upon for a lean year like 1930-31 stresses the importance assigned to their being maintained at strength. As the fixed property totals £915.864, it occupies the second place among the assets. Divided among properties' (£251.908), premises (£629,168), plant, etc. (£34.758), it has fallen from its figures of March, 1930, in all sections. Reduced by the amounts of the mortgages, which remain at £44,800, the property includes stock. Both the premises and the plant group have been written down, the allowance of £3468 in the case of plant, etc., being a generous one. while the £B3BB written off premises approximates 1| per cent. In view of the general decline in values, the reduction need not infer any contraction in the property. The advance .group is down by over £275.000. After the pronounced rise in 1929-30, some reaction might have been looked for, although not perhaps to that extent. In relation to the total assets, however, advances stand slightly higher than a year earlier. The relative positions at closing dates have been as follow:—

It is noticeable that while the proportional margin has been considerably -narrowed during the past 12 years, the actual margin has not greatly altered. Out of the supporting assets, the position now is that some two-thirds consists of fixtures, while a part of the balance is tied up in stock. The cash assets have suffered some reduction in their .various sections. Their total of £272,977 (excluding primary reserve investment) is down by some £50,000 —a difference that is not as great as might be expected in view of the extensive reduction in sundry creditors. Government securities and debentures hold £199,152, which, being partly entered below cost, have presumably been subjected to that depreciation of market values that is so pronounced at the present time. Shares in other companies, at £42,158, have received the same treatment, while the £13,500 placed in deposits may be regarded as a set-off partly to de- . posits borrowed. Cash in bank and in hand (£18,166) will stand similarly to amounts due to bankers. Merchandise at £47,994 is restored to a more normal figure, the decrease being attributable doubtless to declining values almost as much as to smaller quantities. A pleasing feature of the past year’s transactions is the clearance effected, « which leaves the current season almost—, free of encumbrance in its trading activi- ‘ ties.

DiviMarch I’aid-up Gross Net dend 31. Capital. Reserves, Profit. Profit. P.O. 1918 702.737 700,630 366,644 184,933 15 1919 773,010 659.013 359,318 • 160.545 15 1920 773.010 612.146 209,901 ICO. 4 84 15 1921 910.849 617.426 256.789 61.410 15 1922 916,849 C51.29G " 377.656 174.437 15 1923 966.840 709.279 431.112 170,425 15 1924 966,849 ' 783.703 498.039 231.130 15 1925 1,500.000 1.342.143 806.415 320.207 15 1920 1.750,000 1.597.213 846.050 331,326 _ 15 1927 1:750,000 1.639.16* 855.272 329.043 15 1928 2.000.000 1.850.673 880,060 331.466 15 1929 2.000,000 1.867.960 914.201 338.609 15 1930 2.399.892 2.074.644 795.752 209.041 10 1931 2.400.000 2.070.077 630,711 117.476 5

March 31. ♦ Advances. £ Total Assets. £ Ratio. P.O. 1918 _ 1.824.770 3.171.213 57.54 1919 1.720.044 3.199.848 53.75 1920 1.907,430 3.112.516 63.21 1921 2.2S4.606 3.208.803 71.20 1922 2.120.120 3.287.799 64.48 1923 2.018.007 41.447.816 58.55 1924 2.105.070 3.575.757 58.89 1925 3.631.158 5.258.799 69.05 1926 3.687.113 5.744.338 64.19 1927 4.397.223 tf.073.207' 72.40 1928 4.445.217 6.327.200 70.26 1929 5.031.221 6.715.879 74.92 1930 5.886.051 7.346,392 80.12 1931 5.608.741 6.957.454 80.61 • After providing for bad and doubtful debts.