FACTS FOR INVESTORS.

Auckland Star, Volume LX, Issue 43, 20 February 1929, Page 4

FACTS FOR INVESTORS.

LOAN AND MERCANTILE. EMPLOYS £4.500.000 CASH. A SATISFACTORY YEAR. \i ,iuy o> oof rt-cie needed of gradually i.Hi;iii;iic tonfidrncc in the farming out- '.-■■.!< it. is piovidcd in the increased deiii.ind t«r slkvps in the big companies irhdse rort'int , .-! are directly linked up with thr«.<» ot thr 'man on the land. '_ (n thi.= munition the stock of the New Z-vi!,in-l L-μn and Mercantile Agency Co., f'rri prov:-!i"s a Alining example. Twelve •:':..nth* ■I-μ I'liypi-n wore offciing £04 for ■':in ordiiiirv CIO" shares. To-day tin-!-:'i\ inc !■!•■;■ i- line risen to £1-0. In the interim tho i-oinpany h.is disci "fed at its ,-i'innal inpf'-iu:- r <i record protit and lias iri'-ri h.->i''| thi.- i.iti: ot dividend from 7Si to

S per '•■iir Kut it Iμ.-- be'-'H heavy work for directors and m.inascmont to get the tirm to its :nfsrnt position of strength and popuInrity. Sinc-o tho original company was rVuin'ded in England 64 years ago. it has li.issed through stirring and hard times. There were anxious periods in the nineiir>s when most of the big Australian financial institutions were dose to disaster and reconstructions had to be made. In 1803 £'.'40,000 was written off shareholders' capital. However, year by year the effects of those unsatisfactory years have been offset by energetic handling and conservative management. With the progress of the business capital has been increased, so that to-day paid capital totals £2,500,000, in addition to which debentures totalling £2,000.000 have been i?su«d. Of the capital £1.000,000 is held in ordinary stock. £1,000,000 in five per ient cumulative preference and £500,000 in six and a-half per cent second cumulative preferred stock. Of the debentures £1.000,000 are four per cent first mortgage debenture stock, redeemable at 102 t 's per cent on six months' notice from the company, and £1,000.000 four per cent second mortgage debentures (£300.000 of which are held by the company) irredeemable except in a wind-up. The company is therefore working on a capital ot' four' and a-half million sterling and its operations bulk largely in the commerce of Australia and New Zealand. The record of business during the last decade has been as follows: —

XotP. —Second Pref. shares issued in 1927 pay six and a-half per cent dividend. The Loan Company, it wiH be seen, has h««l an excellent year and investors who took up the latest parcel of debentures issued at the end of 1926 should be satisfied with the venture. The raising of the additional capital has been justified by results, for profits have increased substantially, and after making the additional interest charge the directors were able to recommend an increase of the dividend payable to ordinary shareholders. The Loan and Mercantile is the third largest seller of the Australian and New Zealand wool clip, and the handsome results of last season are reflected in the company's turnover. Including shipments to London, the company handled 286,304 bales of a value of £7,183,382.

In recent years the management has given special attention to the dairy in~ dtistry end the chairman of directors, Mr. Alfred Shepherd, reported to shareholders at the annual meeting in London that there had during the year been a considerable increase in this branch of the business.

The administration and office expenses, coupled with the taxes, work out, since 1918, as follows, viz.: —

It will be noted that expenses have again risen, though the addition does not seem out of proportion to the increased turnover. Taxes show a big jump and the chairman's speech expresses the hope that both in Australia and New Zealand the Governments will before long see their way to authorise a reduction in rates. BALANCE-SHEET ITBMB. 1922. 1927. 1928. £ i £ Liabilities nther than deben. . 090,688 1,054.138 1.218.916 Advances 3.<XH>,361 4,055,204 4,283,643 Property 4,617 859 545 Premises 280,290 369,670 342,319 Merchandise .. 144,235 225,307 224,195 Shares in other companies .. 36,873 193,882 190,239 Cash and public securities ... 1,487,740 1,038,286 1,014,170 These figures show a thoroughly sound position. The company is obviously dependent upon the prosperity of its farmer customers, to whom it has made advances, but all outside liabilities (excluding debentures) are almost completely provided for by cash and gilt edged securities. Against shareholders' capital and debentures may be set off the advances a large proportion of which are represented by tangible securities conservatively rallied.

Oross Net Dividends 1st .Inn* ResorvfS. Kfturn. Profit. Pref. Ord. 3O l ~ £ £ p.c. p.c. 1U1O 7OX.74K 631.181! 138.32S r> 8 1ft2O 7i:3.492 711.260 121.746 5 t«i lft'Jl f>17.30 - . 4O."».r ( 67 "16,187 5 t4 l!>22 ."il 8.44S .-.0.-.212 36,143 ii t2 1923 r>21.031 511.S7D 92,583 5 f* 1924 .",27.736 r,47.46S 121.725 5 6 1925 r>30.646 r>05.632 141.890 r. 7 !f>2« r.45,286 616.014 13.",.641 S 7 1<»27 r>47.507 eO3,317 148,002 r . 7i 1928 ."..T1.19H 660,434 170.089 ", 8 • Loss. f Free of Income tax.

Expenses. Administration. etc. Tβ xw. Total. £ £ £ 1018-l» .. 297.597 127,357 424,954 1919-20 .. 328,444 158,070 486,514 1920-21 .. 342,418 101,336 443,754 lf>21-22 .. 312,673 88,396 401,069 1 f>2223 .. 305,363 45,933 351,296 1923-24 .. 317,286 30,458 347.744 1024-2:% .. 332,964 42,778 375,742 19-25-28 .. 350,881 51.492 402,373 1926-27 ., 326,104 50,421 376,525 1927-28 .. 334.098 72,257 406,355