COMPANY’S FINANCE

Waikato Times, Volume 127, Issue 29241, 11 October 1940, Page 7

COMPANY’S FINANCE

VERY SOUND POSITION REALISATIONS FOR WOOL COMMANDEER OPERATED WELL "In congratulating you as shareholders on the results achieved for the year ended July 31, 1940, I must pay a tribute to the management and staff for overcoming the many difficulties they have had to contend with, as, outside of war conditions, it is doubtless apparent to you all that import restrictions, Government regulations and general interference are not conducive to smooth working of any business,” said Mr Edkins in opening his address. Commenting upon the balancesheet Mr Edkins said that capital and reserves showed no variation from last year’s figures, namely, subscribed capital £658,267, paid-up £479,953, reserve account £30,000. The only other liability was sundry creditors, £38,856 6s sd. The assets amounted to £618,831 11s lOd, revealing a percentage of liabilities to assets of 6.27. "The value of the company’s properties stands at £186,738, a decrease on last year’s figures of £1111,” he said. "Depreciation on the whole of the properties has been charged as usual, and renewals and repairs have been charged against current expenses. The value of the whole of the working plant, machinery, office furniture engaged in the business, less depreciation, stands at £6700, a decrease of £2370. Sundry debtors, less reserves, amount to £201,210 9s 9d, a decrease of £28,702 19s 3d Investments of Company “Investments total £11,428 6s 5d This Is represented by shares in companies, mortgages and other securities. New Zealand Government stock, less reserve for market fluctuation, totals £24,885 15s 9d, and there is a New Zealand Government War Purposes loan, free of interest for the duration of the war and six months thereafter, of £25,000. Under the new compulsory loan proposal, this will now have to be converted, for three years free of Interest, and for ten years thereafter at 24 per cent. “There is a credit balance with the company’s bankers of £38,416 10s Bd. Stocks of merchandise have been valued at £124,452 9s 3d, an increase of £21,386 16s 2d on last year. The percentage of expenses to gross profit is 62.83.

"Summarised, the position is as under:— _£ s d Paid-up Capital 479,953 0 0 Total Liabilities 38,856 6 5 Total Assets 618,831 11 10 Turnover 2,299,464 0 0 Gross Profit 186,829 15 4 Expenses 117,397 12 5 Net Profit 69,432 2 11 “The turnover referred to shows an increase on last year's figures of £406,745. Each branch, department and agency has shown a profit, and the net return is only 3 per cent over the whole volume of business. Wool Clip Purchased “As I forecasted in my address to you at the last annual meeting, our New Zealand wool clip has been purchased by the Imperial Government for the duration of the war. and twelve months thereafter,” added Mr Edkins. “We may consider ourselves extremely fortunate that we are not compelled to face the open market, as very few of the countries who in former years were our main buyers would be in a position to operate at present if we had to dispose of our wool by auction. “Notwithstanding the magnitude of the undertaking, it can be said the commandeer operated efficiently and smoothly once the preliminary difficulties were surmounted, although it entailed a considerable amount of extra work for your broker. The results were entirely satisfactory. "The average price of 12 Id per lb. is above the past nineyear average and higher than any particular year over that period, with the exception of the 1936-37 season. “In addition the 12Jd was net. brokers’ charges, with the exception of reclassing, binning and interlotting, being met by the Imperial Government. This brought the average

price per lb. for all wools in the Dominion to 13 l-Bd, or approximately 4d better than the previous season.

“The gross proceeds of the wool handled by the company last season amounted to £316,714, compared with £255,198 in the previous year, an increase in value of £61,516. Another satisfactory feature of the commandeer was that all last season’s wool was disposed of. There is no carry-over. Some of the appraisements last season were arranged at very short notice, to fit in with shipping space available, and the efficiency of the up-to-date equipment in our wool stores enabled us to handle large quantities most expeditiously. Price Schedule Amended “The ensuing season’s clip will be disposed of at a similar average price to last season, but it should be carefully noted that the schedule of prices has been amended to favour clean skirted and properly classed wools,” he continued. “I would stress the importance of growers skirting their fleeces in the shearing shed before the fleece is rolled. If they should not have confidence to class the clip, forward it to the company with instructions to reclass and/or bin. Our experts, with their knowledge of the grades (there are over 800 gradings in the appraiser’s schedule) and with the information they have regarding the requirements of the Imperial Government, are able to sort each fleece into its proper grade or class. If the clip is not large enough to reclass under its own brand, they will bin it. Both methods of handling ensure to the grower that he will obtain full value for all classes of his wool. “Dealing with efficient skirting, the appraisers point out that wools will not be considered fully skirted if the bellies only are removed, although clips so treated will have an advantage over those where the bellies have not been removed. Growers should see that all dirty and fribby points are taken off, and so ensure the fleece being free from all stained and inferior wool. It is impossible to remove all seed from seedy fleece wool, but the collar and heavy seedy points should be removed as well. I again emphasise the importance under the commandeer of careful attention to the preparation of clips for appraisal.”