COMPANY AFFAIRS.

Auckland Star, Volume LVIII, Issue 143, 20 June 1927, Page 4

COMPANY AFFAIRS.

GOLDSBROUGH, MORT AMD CO. SEEKS JiEW CAPITAL. ITS RECORD TO DATE. Al noon to-day the directors of G-old-fcorough Mart and Co. will meet their shareholders at the anmial meeting in Burke Street, Melbourne. After the customary formal business has been transacted, the -shareholders Trill be asked to sanction an increase of the capital of the tempany from £1750,000 to £2.000.000 %y the creation of 250,000 nw shares of £1 each. On this approval be ins obtained Steps "srfll be taken for the issue of the sew shares, which will be offered to •nembeix at 35/ per share in the proportion of 1 for every 7 beld. The presposal is in line ■vrith. the recent tepid development of this great -<vool trading concern. In 1922 the business of Harrison, Jones and Devlin, Sydney, was acquired for £131,450. and in 1924, that of Bagol. Shakes and Lewis, Adelaide, for £2854»0. The purehase of this latter Added South Australia aad West Australia to its business territory. The following figures indicate the forward strides which this old established Vic-, torian firm has made in recent years:— Dividend Mch. Paid-up Cross Net and ■31. Capital. Reserves. Profit. Profit. Bonns £ ' £ £ £ p.c. 1918 702,757 700,630 366.644 154.D33 13 1919 773,010 659,01S 350,318 180,54,-. ir, 1920 773,010 612446 299,901 100.454 K. 1921 016,549 617,426 2T>6.750 61,410 15 1922 916.540 651,21)6 377,63t> 174,437 15 1923 966349 709,279 431412 170,423 15 1924 966,849 753.703 498,039 231.130 15 1925 1,500,000 1,342.143 806,413 320.207 15 1926 1.750,000 1,597,213 540.050 381,326 l> 3927 1.730,W0 •1,®3,755 855.272 320,043 15 •Subject to 10 per cent bonus to staff. From the above it trill be seen that the dividends and bonuses have come forward with remarkable consistency, and each accretion to the capital fund has been followed by proportionately increased earnings. Last year was a particularly good period for the company for its turnover of wool, which is its main line, totalled 306,828 bales. This was a record in its history, and compared with 281,771 bales during the previous year. Under these circumstances the. net profit -was quite satisfactory, despite the effect that a disastrous drought in large areas of Queensland had upon the revenue from that State. The clean up of wool at theend of the year, too, was very satisfactory, only 18,906 bales being unsold at March 31, as against 33,157 bales the previous year. Though the gross profit attains record figures this year, the net return is a shade lower. Management expenses are practically the same, but the provision for taxes and interest is nearly £10,000 higher. The "total charge for interest other than that paid against debenture account exceeds £50,000, which suggests a need for more capital. The business is one in which the financing of pastoral interests in the Commonwealth forms an important part and the following table shows the trend from this point of view:— Ratio •Advances. Total Assets. p.c 1917-18 £1,824.770 £3,171,213 07.54 1918-19 1,720,044 3.199,848 53.75 1919-20 1,967,430 3.112.51G 63.21 1920-21 2,284,60G 3,208.803 71.20 1921-22 2,120,126 3,287,799 64.48 1922-23 2,018,667 3,447,816 58.55 1923-24 2,105,676 3,575,757 58.89 1924-25 3,631,158 5,258,779 69.05 1925-26 3,687,113 5,744,338 64.19 1926-27 4,397,223 6,073,267 72.40 •After providing for bad and doubtful debts. The latest figures show a proportion that is quite high enough for safe business. Probably the Queensland department is responsible for a large percentage of the increase. It will be surprising if the management does not insist upon a curtailment which will lower the proportion before next balance sheet. Coming to the balance sheet we are confronted with big figures and the following table indicates the principal movements during the year under review:— LIABILITIES. 1926. 1927. £ £ Capital 1,750,000 1,750,000 Debentures 1,434,658 1,430,388 Sundry creditors .... 644,752 642,292 Deposits and interest 127,434 416,192 ASSETS. Cash in Bank 359.407 335,479 Deposits 221,500 10,000 Investments and interest 376,858 369,657 Advances and Bills receivable 3,722,634 4,456,350 Properties and stock 940,049 781,003 Plant and machinery 34,184 41,360 Shares in other Com- _ panies 35,518 40,768 Merchandise 24.18S 29,965 The debenture stock, paving 4 and 5 per cent respectively, has been cheap capital for a number of years. It is secured by a specific charge over certain freehold and leasehold properties, and by a floating charge ever the -whole of the assets of the company. In addition, the company is carrying a special primary reserve of £100,000, which is invested in gilt-edged securities. This, which is quite independent of the general reserve now standing at £1,125,000, is a guarantee that the interest will be paid. It is further supported by a secondary reserve of £75,000. Though the balance-sheet is a particularly "clean" one, the fact that liabilities other than capital and debentures have increased nearly threefold during the past three year*—in 1924 they figured at [£298,782—18 another reminder that more capital is needed. Market Prices. In agreeing to allow shareholders to secure the new shares at 35/ each,- the company is virtually making them a present of about 15/ a share. The market price to-day, which has not fluctuated greatly during recent years, is £2 10/, and although some portion of this may be due to anticipation of the issue, there is no reason to expect any marked decline. The following table shows the market value of the shares at thia period during the past four years:— 1924. 1925. 1026. 1027. { « s. d. £ s. d. £ s. d. £ s. d 2 8 0 2 7 _O 2_ 9 0 210 0 GORDON AND GOTCH, LTD. Gordon and Gotch, Ltd., in its report for the six months ended March 31, discloses a net profit of £45,505, an increase of £6280 compared with the profits of the previous half-year. In addition to the dividend of eight per cent per annum on ordinary and preference shares, absorbing :£24,000, a bonus of two per cent per annum is recommended,' accounting for '£5000. A eum of £10,000 is carried to reserve, increasing that account to £150,193. A sum of £527 is carried forward, against £1144 brought in to the account. Balance-sheet figures show that the inortgage has been slightly reduced, there is a substantial fall in creditors' accounts, and the overdraft is down by £36,742. Freehold property h»3 increased by ;-£24,30p, and there has been some reduction in stocks and in debtors. The directors report that the company's business during the year made constant progress. BANK OF ADELAIDE. ISSUE OF XEW SHARES. ,-*■'» special eeneral meeting of the shareholders in the bank of Adelaide, held on Jane 10, it was resolved to increase the capital by the creation and ismie of 50,000 new shares of £5 each. These are tojje issued to shareholdes at £2 Premium m the proportion of one for ■w *very four shares held. A 't