WILSONS CEMENT CO.

Auckland Star, Volume LXII, Issue 119, 22 May 1931, Page 4

WILSONS CEMENT CO.

REDUCED PROFITS LAST YEAR DIVIDEND AND BONUS l2'/ 2 PER CENT. SUBSTANTIAL RESERVES. The thirteenth annual report of the directors of Wilsons New Zealand Portland Cement Co., to be presented at the annual meeting on June 10, states that for the year ended iiareh 31 last the net profit, after making provision for depreciation, bad debts and taxes, is ±.74,182. To this is added the balance brought forward from last year, £66,207, less interim dividend paid, £30,000, leaving available for appropriation £110,390. This the directors recommend should be disposed of as follows: —Payment of a final dividend of 5 per cent and bonus 2% per_ cent, £45,000, and to carry forward £05,390.

Past Years Compared. Through a year of severe business depression Wilsons (N.Z.) Portland Cement Co. has emerged, one might almost say triumphantly, for the results are, on the whole, very satisfactory. It is true net profits are down to a point lower than they have been since 1925, but they are still sufficient to pay the usual 10 per cent dividend, and, with very slight assistance from reserves, the 2% per cent bonus that was first distributed last year. .Interesting details of the company's record during the past decade are furnished in the. following table: —

The profit and loss account furnishes no particulars either of expenses or turnover, and so long as distributions continue on the present generous scale shareholders will doubtless restrain any impatience they may feel in regard to these obvious omissions. One does not need to go far for an explanation of the lower profits shown during the year just closed. It is common knowledge that building operations have beeu virtually at a standstill during the past fifteen months, while local bodies have been slowing down 011 road construction over the same period. However, there have been other avenues for business, and one may assume that the Government orders in connection with the Arapuni reclamation will have come as_ a veritatiTe godsend in a year that would otherwise have proved a particularly lean period. . The amount required for the h cent dividend and bonus is £75.000, above the net profits. In general terms might have appeared desirable to withhold the bonus but the company s reseives i>e so substantial that the larger disj tribution is fully justified.

Balance-sheet Items. The tru? significance of the progress made by Wilsons in the past decade, and the exceptional strength of the position it has now attained are best illustrated m the balance-sheet. The following tables indicate the movement of the items covered hy the 'balancesheet during 1927, 1930 and 1931: LIABILITIES. 1927. 1930. 1931. £ £ £ Capital (paid) . . 600,000 600,000 600,000 Sundry creditors (including procom°e n tax° r . A ll .' 104.039 61,122 61,729 Ro"™ '""" r " n ™ IS IOOW ifcSS P 112.421 121,208 ASSETS. 1927. 1930. 1931. £ £ Freehold a n (1 leasehold land, limestone d cposits, buildings and plant, workers' dwellings, cia*tion) SS 422,877 297,932 202.002 Stocks ..." 27,360 57.719 53,66 Sundry debtors ■ 90,237 72,770 74,10 GO company d shares 271,612 *388,170 458,620 Ca balances 47,130 100,390 69,345 ♦Includes Wilsons Collieries shares.

£49,993. General reserves have been increased from £25,000 to £110,000 since 1927—a very remarkable record and at the sail - time substantial additions have been mad-J to the marine insurance reserve, J ' of these reserves are invested in (*>v eminent bonds, so that they are quite independent of any fluctuations that may arise in the business itself. , • Very few details are made available m the balance-sheet. In 1929 and 1930 the company's interests in Wilsons Collieues were stated separately at £49,993, but in the latest sheet investments in Government stocks and shares of other companies are lumped together under the one heading. This is not as it should be, for shareholders are entitled to full information concerning the disposition of their S'"T''' S funds. Fixed assets are down £30,000, which probably represents the very substantial depreciation that the company writes oft" annually. Cash and bank balances are £30.000 lower, but investments are £70,000 higher, and the amount in hand seems big enough to meet all requirements. Assets Are Mostly Liquid. Another basis of comparison which iiirnishes a useful indication of the company s changing conditions from year to year is presented by the following table:

Year by year the directors have aimed to place the company in a strong position financially, and by steadily increasing the ratio of liquid assets they have brought it to a state where ordinary and even extraordinary business fluctuations can be viewed with equanimity. Few trading concerns in the Dominion are so well situated in this respect. The satisfaction of investors with the trend of affairs is reflected in the price offered for the shares. The market price of the £1 shares as at May 16 m recent years has been as follows: £ s. (1. 1924 J 9 g 1025 : i 1026 i Jjj f. 1028 :: 119 « 1020 . 2 2 » 1030 on S 1031 2 0 3

Marine Net Reserves. Inuur'ce. protit. Dividend. Mar. 31. £ £ £ P c - 1922 . 17,350 5,007 41,98!) 0J 15)23 . 25,010 0.71!) 53,200 71 19' ( 4 34 824 8,127 50,708 7 11-12 1925 ! 52,801 10,534 07,977 8 1-3 1920 . 79,212 17,145 80,411 10 1927 . 107,421 23,750 88,208 10 1928 . 135,00(! 30,307 88,245 10 19 -, 9 . 101,252 32,830 85,586 10 1930 . 170.20S 34,057 89,955 12J* 1931 . 175,389 30,309 74.1S2 12J* ♦Includes 2i per cent bonus.

Fixed Total Ratio to Total, assets, assets. Fixed. Liquid. £ £ 1001.00 501,205 733,501 08.34 31.60 l!)22-i2o 445,203 733,427 00.70 39.30 ii)'">3-24 .. 414,400 730,541 50.27 43.73 1924-25 .. 437,270 757,959 57.29 42.71 1925-20 . . 415,800 794,!)3;> 52.31 47.09 1920-27 . . 422.877 S05,210 4S.88 51.12 iii'iT.'ia 400,911 800,391 40.90 53.04 1') r >8- r '9 !. 347,501 882,4S0 39.14 00.80 19' , 9-30 . . 297,932 910,9S7 32.49 (i7.nl 1930-31 • • 202,002 918,428 32.44 07.50