STEADY EARNING POWER

Press, Volume LXXVI, Issue 23194, 4 December 1940, Page 6

STEADY EARNING POWER

FINANCE COIMPANIES’ EXPERIENCE COMMONW EALTH BANK SURVEY / Figures compiled by the Commonwealth Bank and published in the "Statistical Bulletin” for October, hovering essential particulars of banking and other financial companies, respectively, reveal general steady earning power. Both profits and dividends have been well maintained since 1936, with evidence of an improvement this year on the figures for last year. The share price index in respect of banking, insurance, and trustee companies, hotyever, has receded considerably during that period. Net profits earned and amounts distributed in dividends by banking companies show considerable strength and stability. An analysis of the figures relating to 11 banks shows that, with the amount of shareholders’ funds virtually constant (the total increased only from £69,474,000 in 1936 to 69,654,000 in 1939), net earnings moved up from £2,597,000 in respect of the 11 balance-sheets presented during 1936 to £2,812,000 during 1937, and to £2,879,000 in 1938. There was a slight recession to £2,831,000 during 1939, but the indications are that the upward trend has been resumed this year. Figures available from seven banks which have presented balancesheets this year show aggregate net profits of £1,187.000, representing 4 per cent, of shareholders’ funds, compared with £1.162,000 earned by the same banks in the previous year, equal to 3.9 per cent, on shareholders’ funds. Dividends paid by banking companies followed a slightly different course from that of net profits, but they also have shown narrow variations, both in amounts paid and in proportion to shareholders’ funds. The 11 balance-sheets issued in 1936 provided for dividends aggregating £2,365,000 (equal to 3.4 per cent, of shareholders’ funds); in 1937, £2,647,000 (3.8 per cent.), and in 1939 £2,608,000 (3.7 per cent,). The seven banks which have so far issued their balance-sheets in 1940 have distributed £1,053,000 in dividends, representing 3.6 per cent, of shareholders’ funds, compared with £1,018,000 in 1939, equal to 3.5 per cent, of funds. Other financial institutions, comprising insurance companies (other than life), trustee, pastoral, finance, hire purchase and general finance companies, building societies and land, building and investment companies, have also made a good showing. Those which issued balance-sheets during 1936, numbering between 120 and 130, revealed net earnings of £2,294,000 (5.6 per cent, of shareholders’ funds),- an average for each company of £20,500; followed by £2,798,000 (6.4 per cent.) or an average of £21,500 each, in 1037; £2,663,000 (6 per cent.), an average of £20,800 each in 1938, and £2,511,000 (5.9 per cent.), an average of £20,750 for each company in 1939. Figures relating to 63 companies which have issued balancesheets this year reveal net earnings of £1,435,000 (6 per cent.), as against £1,348,000 (5.8 per cent.) for these companies last year. Dividends paid by these financial companies show rather wider variations in respect of the amounts distributed than has been the case with banks, but in relation to shareholders’ funds (£41,031,000 in 1936, £43.446,000 in 1937, £44,296.000 in 1938, and £42.351,000 in 1939) the percentage has fluctuated only between 4 per cent, and 4.4 per cent. Thus, dividends disclosed by 122 companies in H136 bal-ance-sheets amounted to £1,656,000 (4 per cent,), an average of approximately £13.500 each; by 130 companies in 1937 to £1,903.000 (4,4 per cent,), an average of £14,600 each; by 128 companies in 1938 to £1,855,000 (4,2 per cent.), an average of £12,100 each, and by 121 companies in 1939 to £1,746.000 (4.1 per cent.), an average of £14,400. Balance-sheets of 63 financial companies other than banks issued this year show shareholders’ funds totalling £23,854,000; aggregate net profits of £1,435,000 (6 per cent, of shareholders’ funds), and dividends totalling £1,137,000 (4,8 per cent, of shareholders’ funds), compared with funds of £23,230,000, total profits of £1,348,000 (5.8 per cent.) and dividends amounting to £1,059,000 (4.6 per cent.) during the previous year. Interesting inferences may be drawn from the fact that the share price index of financial companies, in October each year, was 117.50 in 1930, 111.57 in 1937, 108.02 in 1938, 94,12 in 1939, and 91.48 in 1940. SMALL BIRDS AND GRASS GRUB REPLY TO FARMERS’ UNION INQUIRY “In general authorities agree that many small birds cause damage to grain or fruit at one period of the year, while at another useful work is done in reducing the number of insect pests,” states a letter received in reply to a request from the Mid-Canterbury Executive of the New Zealand Farmers’ Union to the Director-General of Agriculture (Dr. A. H. Cockayne) for information about the activities of different species of small birds in controlling the grass grub pests and the consequences of indiscriminate killing of birds. The conclusion that the destruction of birds by poisoning must result in a wholesale reduction of their numbers, irrespective of the useful work which might be performed by any one species, was also stressed. Another generally accepted opinion based on work carried out. overseas is that marked increases in the number of insect pests and losses due to their depredations is clearly related to the bird population in the area concerned, the reply continues. In New Zealand, where the diet of the birds is related to the time of the year, it is essential •to assess the value of the useful work in destroying pests compared with the damage done to grain and other crops, but apparently there was no definite information available on this point. The letter also gave details of the sources of authoritative information on the relation of birds Ao agriculture. It is the intention of the executive to circularise the complete reply to all its branches. KAIKOURA LEADS At the head of the grading list for dual plant dairy factories in New Zealand in the 1939-1940 season is the Kaikoura Dairy Company, a record of which the farmers of the district may be justifiably proud. There is a total of 152 creameries in New Zealand, that is, dual plant factories manufacturing butter for export. The six leading factories in the grading were: Kaikoura 94.791 average grade. Murchison 94.789, Rangitikei 94.654, United 94.594, and Karamea 94.584.