BIG RISE IN PROFITS

Sun (Auckland), Volume III, Issue 674, 28 May 1929, Page 10

BIG RISE IN PROFITS

FARMERS’ TRADING CO. FINANCES

‘BRIGHTEST PROSPECTS” On the past year's working there has been a substantial increase in the profits of the Farmers’ Trading Company, Limited, over those of the previous year. The shareholders are to hold tlieir annual meeting on Wednesday. June 19, and Mr. James Boddie, chairman of directors, in his report for the year ended March 31, says that the company is in a fortunate position, in view of the complaints of general depression by some business houses. “The net profit for the year, arrived at on a very conservative basis, and after allowing for full depreciation, is £ 49,334, against £42,561 last year,” says Mr. Boddie.

“This profit, added to last year’s carry forward, gives £79,425 to be dealt with. £25,250 is all that will be required for the payment of dividends at me rate or 7 per cent, on our preterence snares ana lu per cent, on ordinary, which dividend the directors now recommend. .Alter writing down buildings a lurcher £2,70U, and reserving for income tax, in future at the same rate oi prom there will be sufficient to pay the present dividends also 7 per cent, on the new £su,uuu worth o l ‘B’ preference shares ana 10 per cent, on the new £ 50,000 worth of ordinary shares now being offered, without taking into consideration the lact that we will save a further £6,500 interest by redeeming £ luo,ooo worth oi debentures.

"Our total debentures at March 31 of.tins year amounted to £234,38i,but as £64,600 is not due till 1935, and as we redeemed £ 21,u00 m May there remains only £l2 6,767 to meet in 1930, and it is the intention of the board to give six months’ notice of redemption to these aeoeniure holders. The proceeds of the sale of the shares now being offered will be used for this purpose, on March 31 we had a credit balance in the bank of over £22,000, this being the nrsi balancesheet since 1920 snowing such a satisfactory cash position, our reauve for possible bad debts in branches still giving credit amounts to 20s in the £1 on ail accounts 12 months old and over, and in audition provides 10s in the £1 against all accounts between six and 12 months, which, it is needless to say, is more tnan is necessary lor farmers’ accounts.

“With the present appropriation we will have £li,suu depreciation reserve on our buildings and £25,000 on time payment accounts, and after all charges ana dividends have been met we will be carrying forward in our profit and loss aeouni over £ 40,000. These results have all been accomplished after taking our stocks in on a conservative basis.

"At no time in our history have we set out a year s trading with such bright prospects.” Messrs. F. Coibeck, H. E. W'orsp and J. H. Hayward, directors retiring by rotation, are offering themselves for re-election.

A comparison of the company's results for three years is:

1927. 1928. 1929. Brought forward £409 Net profits . . . 50,246 42,562* 49,335*

£50.655 £67,618 £79,428 Building reserve 5,000 5,000 2,750 Dividends— Pref., p.c. .. 6 6 7 Ord., p.c. S S 10 Amount ~ .. 20,599 32,524 t 25 250

Carried forward £25,056 £30,093 £SI,ITS* *Subject to income tax. flncluding in-

An increase of £15.111 was shown in the company's gross profit of £236.280. against which expenses increased by £8,338 to £186,945. Compared with £997,090 last year, the company’s assets, stated in' the balance-sheet, are £1,040,171. The main items, with the corresponding figures for last year in parentheses, are:

Properties, less buildings reserve, £374,773 (£364,333); plant, fittings, etc., £63.820 (£60,868); mortgages. £20.999 (£25,185): stocks, £309,065 (£314,910): sundry debtors, including time-payment accounts, less reserve, and branch accounts, less reserve, £219.133 ( £214,394). The main liabilities, with last year’s figures in parentheses are:—Capital, £31.232 (£304.021); secured debenture stock, £234.387 (£261.120): fixed deposits, £169.054 (£100.542); mortgages, £ 64,536 (£ 65,790); current accounts. £92.121 (£71,866): bills payable and sundry creditors. £78.658 (£69,346); reserves for accrued expenses, including interest and insurance, £7.145 (£7,250).

In 1928, the liabilities included £52,114 to the Bank of New Zealand. There is a credit balance of £22.810 in the bank on the present occasion, and cash in hand and payments in advance, amounting to £21,669, show a rise of £4,255.