NEW ZEALAND SHIPPING CO.

Auckland Star, Volume XLIV, Issue 279, 22 November 1913, Page 11

NEW ZEALAND SHIPPING CO.

CA2»ITAI, -R t; a-w-a. α-w rerun hi. 1 ! 1 CHAIRMAN'S STATEMENT. i.Frota Our Special Correspondent.) LONDON. October 17. The annual general meeting of the 'X-ew Zealand shipping *. 0.. ijtd_. was held at 138, Leudemiaii Street, London, on October 14th, but the Pre»s was excluded, irom the gathering. The Board subsequently issued, the folio-wing official account of. the proceedings: — A dividend of 16/ per snare (of which 8/ per share was paid in April last) was declared, fre.e of income tax. the retiring directors re-elected, and the auditor rcappourted. In the course of his a-ddress to the shareholders, the chairman. Mr. William C Dawes, made th» following remarks regarding the proposed scheme for the rearrangement, of the Company's capital: —- It will be remembered by old shareholders that some twenty-three years ago the- position of the Company was very different from what it is to-day. My father. Kdwyn Da.w<¥. had recently become oiiairniaji of the company, a.n>i he derided on the rather drastic step of writing off the s'jm of £1 from eAch ordinary share of £10. a course of action which. I think you would agree, ha..- teen fully justified. Since then the director? have always looked forward to the time when the £2 could be replaced without weakening the. financial position of the company, and in their opinion the time has now come. In the balance-sheet for the year ended .Tune 30, 1912. there appeared for the first time .1 new item. "capital reserve, £20f.116."" Since that date capital re-spj-vrs have been increased, and after this capitalisation has been effected sufficient reserves will be left to maintain thp company'? strong financial position, and the reserve a"nd insurance accounts, shown in the balance-sheet now before you. will not need to be trenched upon. Shareholders will notice that power is taken to create £1.000.000 -i\ per .ent cumulative preference >h:sres. of which under the present -.-heme only £-226.000 will be issued, and the balance will be available to provide for future capital requirement-. It is not the intention of the directors to make any further issue of sharr* at present, but in view of the natural expansion of the company's business, they cons'.der it wise to put themselves in ? position to raise further capital when it is required. Not so very many years ago steamers in every way suitable for the company's trade could be built for about. £75.000.' To-day a steamer which will satisfy the requirements of our shippers costs " more than £200.000. and shareholders will understand that as the older steamers have to be replaced, and the fleet increased by the addition of these expensive vessels*, the capital outlay required is very la.rge compared with what it, once was. "it is. perhaps, hardly necessary to say so. bnt I think I should point out to shareholders that such a capitalisation of assets as we propose dor.* not necessarily increase the earning capacity of the company. It. simply enlarges the area over which the available profits will have to be spread." Commenting on the accounts issued by the X.ZJS. Co.] the "Investors' Guardian" 5a VS ; '■"The accounts -do not disclose the amount of the depreciation provided in respect of the fleet. Twelve months ago the book value of the. fleet was £1.423.804, but subsequent to the closing of the accounts, the four steamers taken over from Honlder Brothers and ; Go. were sold, and the. book value of the fleet at June 30, including payments on account of new steamers, and after deducting depreciation, was. £1-228.151. The fleet consists of seventeen steamer*, and with one vessel of 10.000 tons, building, the tonnage is '144.357: the book value of the fleet averages about £S 10' per ton. "The naJa-nce-shect now issued di?closes a lia-bility for bills paya.ble in reTwelve months ago the liability on tins account was £452J7L The current liabilities, inclusive of £12.!)S0 bills payable on working ar-r-ount. were £404,02-2. against which there, was owing to the company £421i>f>2. WTiile the financial I position is -undoubtedly better than it. I was 12 months ago. it is still capable iof jjupro v emectl., and though the desire of the directors to replace the capital written off -in ISSO is readily under--8bood;-w--do-not ««••• -wby ■ tbe- directors should wish £o pay a .bonus in preference shares. If the preference shares it is proposed la as f.o dispose of had been issued for cash, the amon&t raised would have been sufrV"iemt to clear off the gTeater part "f the liability existing at June 30th last in respect of steamers. "As the depreciation provision is not made known, ii is not possible to form a thoroughly reliable view of the. company's position from the accounts. The £8 ordinary share? arc qnoW at 18-20; that, on the baeis of a 10 per cent dividend in prosperous yeans, appears to be a high valuation, but it must be borne in mind -that it carries the proposed iionus chares. The price of the 4 per cent- debentures is 03-95."