STEADY PROGRESS

Sun (Auckland), Volume II, Issue 440, 23 August 1928, Page 12

STEADY PROGRESS

DAIRY COMPANY’S YEAR REVIEW OF ACTIVITIES (From Our Oxen Correspondent) HAMILTON, Wednesday. Increases in paid-up capital, investments, and sales have been recorded during the past year by the New Zealand Co-operative Dairy Company, Ltd., the annual meeting of which was held in the Theatre Royal, Hamilton, on Wednesday. In reviewing the company’s. position the speakers dealt with the expansion of activities, and referred to the present strong financial position. The addresses contained a decided note of optimism regarding the present-day marketing outlook which was described as bright and promising. Mr. Dynes Fulton, chairman of directors, presided over an attendance of about 400 shareholders. Associated with him were Mr. W. Goodfellow, man- 1 agijig- director, Mr. H. H. Sterling, general manager, Mr. G. W. G. Thomson, and the members of the directorate. “The past season’s output was very disappointing from the producer’s point of view,’’ said Mr. Fulton, in moving the adoption of the company’s report and balance sheet. He added that from the beginning of the season the climatic conditions were entirely against a large . production. Notwithstanding this the company actually had an increase in butter-fat over last season. The increase, in view of the fact that the whole area where the dry spell was most severe, is practically all supplying the New Zealand Co-operative Dairy Company, Ltd., indicates the very large increase the company would have had under a normal season, said Mr. Fulton. FINANCE FOR SUPPLIERS “The Finance Company which was formed in the 1925-26 season has continued to render great service to many of our suppliers. This company is a subsidiary one and is run entirely by the dairy company for the benefit of its. suppliers who may require financial assistance. The advances in the 192526 season were £25,000; in 1926-27, £67,000; in 1927-28, £83,000. The amount repaid is £115,000, and the amount outstanding is £60.,000. The total number of suppliers assisted to date is approximately 900, and the average amount advanced is approximately £2OO. “The final figures in the Finance Company’s balance sheet show that its operations were very satisfactory. Within the past few months the Government has brought in legislation providing for loans to farmers under their rural intermediate credit system. Very satisfactory arrangements have been made with this board whereby our* company guarantees the amount of the loan to the Rural Intermediate Credit Board, and that board finds the money at 65 per cent. “Herd-testing under the group system has continued to progress, and under the Farmers’ Union control in 1922-23 the number of cows tested was 6,900; taken over by the New Zealand i Co-operative Herd-testing Association in 1923-24 there were 31,003 cows tested; in 1924-25 there were 58,308; 1925-26, 57,756; 1926-27, 68,732; 1927,28, 76,697; and for the incoming year the indications are for a very substantial increase. “Our shareholders and suppliers are aware that our general manager, Mr. H. H. Sterling, will shortly be severing his connection with the company to take over the position of general manager of the New Zealand Railways. This is a matter of very great regret to us, because Mr. Sterling is a man of very outstanding ability. INDICATIONS BRIGHT “The indications for the present season are very bright, insomuch as the prices are good for dairy produce and the stocks at Home are small, in comparison with other years. In reviewing the position generally it will be seen by the 'bajance-sheet that your company is in an exceedingly strong financial position, having added this year to our capital an additional £56,000, which brings our paid-up capital of £1,056,041 5s lOd. “This very satisfactory position enables your directors to give a service to our shareholders on matters pertaining to the prosperity of *our .dairy farmers in a manner that no other organisation in this Dominion can do,” stated Mr. Fulton. “The policy of our company in the future will be, as it has been in the past, to continue without ceasing the fullest measure of service to our suppliers, coupled with the best returns that can be obtained from a prudent and efficient policy of our board.” PAID-UP CAPITAL INCREASED Items in the balance-sheet were explained by Mr. Sterling, who stated that the nominal capital of the company remained unchanged this year. Unalloted shares account for £151,475 as against £196,101 for the previous year. The subscribed capital had accordingly increased by £44,626. The paid-up capital stood at £1,056,041, as against £1,000,039 for 1926-27, an increase of £56,002. During the last year the amount placed to the reserve account had increased from £28,585 to £54,387, a difference of £25,801. Mr. Sterling said the insurance reserve had been unchanged since the amaglamation. Amounts had been set aside by the Dairy Association for insurance. Debentures stood at £30,000, the same as last year. Referring to the amount distributed to suppliers on the May butter-fat Mr. Sterling said the decrease of £ 20,000 was due to a smaller supply compared with the same month for the previous year. Continuing, Mr. Sterling said the contra accounts of suppliers had increased from £38,614 to £56,233, which was almost entirely due to the heavy increase in slag and other fertiliser business. Amounts due to sundry creditors had decreased from £124,463 to £96,899. The sum of £42,782 was due on suppliers’ orders and £26,521 was due on goods supplied. Confidence in the company’s organisation, said Mr. Sterling, was shown in the fact that sundry deposits had increased from £61,588 to £90,528. Arrangements for more prompt shipments of produce, leaving smaller stocks on hand, had accounted for a decrease of £470,288 on the ordinary current bank accounts during the year. The milk powder account had shown a decrease of £25,147 since the last annual meeting. The amount standing at the Canadian Bank of Commerce was now £3,869, as compared v; T ith £3,155 last year. Mr. Sterling said the company’s property and plant were now valued at £1,131,224, as against £1,128,027 a year ago. Depreciation had increased from £30,639 to £52,462. The principal items accounting for the increase in the plant and property being additions at Ngongotaha £10,104, Waimauku £10,176, Coromandel £i>os, Waitoa whole milk factory £4,182, head office plant £4,192, condensed milk plant £5,'725, a total of £35,184. Mr. Sterling mentioned that the mortgages account had decreased from £1,823 to £1,178. The milk powder preliminary expenses totalled £37,595, the same as last year. The Glenafton collieries share account had decreased from £98,621 to £98,091. INCREASED INVESTMENTS Mr. Sterling said that the milk powder development account had been cleared off during the year. A decreo.se of £164,277 was shown in the sundry

debtors account, which now stood at £231,900. Loans to suppliers and sundry advances showed an increase of £16,386, which was due practically wholly to the dry spell. Investments had increased by £12,485, and stood at £107,529. The value of stocks had decreased from £601,636 to £302,262, due to the prompt shipments of produce. Stores had increased by £7,830. Dealing with the butter profit and loss account, Mr. Sterling said purchases had increased from £2,778,547 to £3,170,459, a difference of £391,912. Wages, sundry factory expenses and maintenance had increased from £137,028 to £145,413. Power and fuel cost £1,505 more than they had done in the previous year, this year’s cost, being £11,671. Freight and cartage had increased from £54,736 to £55,520, while freezing, grading and shipping charges had decreased by £8,145, this year’s expenses under this head being £40,407. Interest, insurance, rates and taxes accounted for an expenditure of £509, a saving of £14,132 having been effected in interest owing to prompt shipments of dairy produce. The sum of £17,542 had been set aside for depreciation, an increase of £1,324. Mr. Sterling pointed out at this juncture that the company had now two additional factories. The advertising and donations account had decreased from £4,752 to £4,397. A decrease of £2,225 was disclosed in the office and general administration charges, while directors’ fees and expenses had increased from £2,748 to £ 3,068. The sum of £ 6,551 had been paid as the dairy control levy, as against £13,466 last year. INCREASE IN SALES The reserve account had increased from £22,922 to £23,182, while the balance to the bonus account had decreased by £77,698, and now stood at £426,981. Sales had increased from £3,692,169 to £4,263,089, a difference of £570,920. Receipts for rents had increased from £3,654 to £4.074, while stocks of butter were valued at £185,704, as against £474,913 last year, a decrease of £296,209. Stocks of butter were lower this year, and were taken in at Is 6d a pound as compared with Is 5d last year. The cheese payouts at individual factories this year were as follows, the figures for 1926-27 being given in parentheses: — : East Tamaki. 22.8 Id (18.41 d); Orini, 21.14 d (16.75 d); Shelly Beach, 20.91 d (17.41 d); Matatoki, 20.63 d (16.65 d); Wharepoa, 20.57 d (16.48 d); Manawaru, 20.45 d (16.45 d); Hairini, 20.44 d (16.63d>: Matamata, 20.34 d (16.83 d); Rukuhia, 20.17 d (16.56 d); Hikutaia, 20.16 d (16.40 d); Huirau Road, 20.1 id (16.06 d); Aka Aka. 19.83 d (16.26 d) ; Eureka, 19.75 d (16.65 d); Gordonton, 19.62 d (16.24 d). Referring to casein figures, which excluded the Te Awamutu factory, the general manager said purchases

stocks represented £19,141 this year as against £20.606 last year. The de- ■ crease was due to a drop in the amount of casein manufactured, A premie» 1 of 1.98 d per lb butter-fat was allowed to casein suppliers this year. Tne : a. ter-fat received at casein factories during the last season equalled 2,145.7261’.', i as against 2,253,9341 b for 1926-27, u decrease of 108,2081 b. Sales in the casein department had amounted to £42,343. a decrease of £6,820 compared with last year’s figures. Drying charges had increased by £463, while stocks had decreased in value by £230. TRADING DEPARTMENT Greater use bad been made by suppliers of the facilities offered by the company’s trading department. Purchases for 1927-28 totalled £15,096, as compared with £8,034 for 1926-27. An increase of £2,444 had been shown in the wages, rent and office charges in the trading account. A gross profit of £4.954 had been made on handling fertilisers during the year, while the whole trading department had a turnover of £ 205,409 during the year, an increase of £95,641. .Mr. Sterling estimated that the company’s suppliers had saved a total gf £56,082 on the purchase of fertilisers during the last year. During the last three seasons the Finance Company had advanced £175,000 to suppliers, and of this sum £115,000 had been repaid. About 900 suppliers had been assisted, the average amount advanced being £ 200. There had been a slight* drop in the output of the company’s box factory, 1,160,805 containers of all types being made last seasqn, as compared with 1,166,614 for the previous season. A profit of £25,020 had been made in the box factory. The gross turnover of the company, said Mr. Sterling, for the year totalled £6,333,849, as compared with £5,067,241 for the previous season. Butter showed an increase of £1,203,864 and manures an increase of £59,275. AMALGAMATED DAIRIES, LTD. Reference to Amalgamated Dairies, Ltd., was made by Mr. Sterling, who said that there had been a good deal of surreptitious propaganda attacking this concern. Amalgamated Dairies, Ltd., was established with a view to regulating supplies of dairy produce on the London market and to selling produce at the best available prices against organised buying. Mr. Sterling said it had been suggested that Amalgamated Dairies, Ltd., had made £20,000 out of the company’s produce. This suggestion was not true. Mr. Sterling said he foresaw a tremendous future for the dairy industry in New Zealand, and as far as the Waikato was concerned, he felt that th© possibilities had been only re-

motely touched. He was convinced th*»l every reason existed for optimism with regard to the outlook for the dairy farmer. A new system of share issue to adopted was mentioned by Mr. Sterling, who said the company had now grown to such a position of financial strength that the directors that new shares could be allotted cm the fully paid-up basis. Under the new scheme the new supplier would enter as a fully paid-up shareholder. A reassuring statement regarding tn® milk powder position was given t>r Mr. Goodfellow. He said that since 1925 the preliminary expense had been completely wiped off. Tne dried milk factories were paying th whole of their expenses, and were making a profit over and above the vaiu* of butter-fat.-The report and balance-sheet were adopted. MARKETING OUTLOOK The marketing position was fully explained by Mr. Gocdfellow, who sal that in his experience extending over 17 years he had proved that a consistent consignment policy returned better price than any other selling system. n Mr. Goodfellow stated that ing was one of the biggest bugbear* of the dairy business. There were-' merchants in Tooley Street doing business in New Zealand produce there was a considerable amount speculation in Sew Zealand P r< - Kl which was to the disadvantage ot P dueers. The speculators bought™ . the f.o.b. basis and were certain of tne profit. _. OUTLOOK DECIDEDLY BRIGHT An optimistic view of the ing outlook was taken by • lr ' * tIT fellow, who said that ‘he prophecy of a few years ago regarding th creased production of dairy P in Siberia, Argentina, Canada and AJtrulia liud not been realised. GLEN AFTON COLLIERTES Dealing with Glen A«on Col'krK* Limited, Mr. Goodfellow said th.a m ing the year ended Decembe:..Luced- . 176.254 tons of coal had t* >en P f Thu output had been disposed" follows: —Sold to sutlers. 1 to factories, 36.092 tons. K f"‘ lo 'l 241 1,245 tons; and to theJJubHG tons. Substantial rebates paid on coal purchases to mppl Messrs. Chambers. TV ort * ?oTfibers were reappointed auditors company. to Votes of thanks were' Pa- f, retar y. T. L. Hames. the reUl ?” g is leaving and to Mr. Sterling. * the services of the coro . p ‘ ' in irfousiy Mr. Dynes Fulton for th« re-elected chairman of direc ensuing year. .... to tl»— A hearty vote of th chairman concluded th