NOT QUITE SO GOOD.

Auckland Star, Volume LXII, Issue 214, 10 September 1931, Page 4

NOT QUITE SO GOOD.

PUKEMIRO COLLIERIES.

LESS PROFITS LAST YEAR,

AND LOWER DIVIDEND

Fifteen per cent dividend! At a time when the bulk of our mercantile institutions are hard put to it to make both ends meet it is cheerful reading to peruse accounts which permit so liberal a distribution as 15 per cent: Shareholders in Pukemiro Collieries received an interim dividend of 5 per cent in March and the directors now recommend that for the second half of the year a further 10 per cent is to be paid. The annual meeting is fixed for September 30. Despite the general difficulties of trading, intensified in the case of the Waikato coal companies by cut-throat competition, the year's operations show a gross profit of over £30,000. This is £14,000 less than for the preceding twelve months, but there has been a substantial reduction in the expenses account, and net earnings, after making allowance of £5000 for taxation and £1687 for depreciation, stand at £14,436. This is a little short of the amount required for a 15 per cent dividend, but considering the substantial resources of the company and general circumstances of shareholders at the present time, the directors have felt justified in making a small Call on reserves. Details and comparisons are shown in the following table: — Gross Net Div. Carried Profits. Profits. Rate. I ord. £ £ p.c. £ 1026 ... 64,147 55,400 17i - 39,924 1927 ... 59,397 49,405 30 47,24b 1028 ... 61,125 50,720 35 £0,037 1929 ... 63,000 51,580 3o £3,402 1930 ... 44,361 33,063 2d 52,730 1931 :::.30,'i05 14:436 15 62,871 A glance at the above table will indicate what a remarkable earning power has been displayed by Pukemiro Collieries, for the dividends of the last four years have been more than sufficient to pay back the whole of the shareholders' capital m that brief period. The. big reduction in profits, which have been more than halved in the last two years, is chiefly attributable to the competition already referred to. Fresh companies have entered the field, and in the rush for business have cut prices severely. The net result has been reduced turnovers for the older companies, and lower rates of profit per ton of output. A Clean Sheet. The accounts under review are for the period ended August 31, and it is in keeping with the company's past records that within the brief period of ten days the accounts are presented in a particularly "clean" condition.. All outside liabilities have been settled, and the company starts its new financial year owing no one a penny, and with cash in the bank. This is an excellent record from an accountancy point of view. The following shows the movements in the principal assets during the year: — ASSETS. 1930. 1931. £ £ Mining lease 1,850 1,800 Plant, buildings, machinery and branch lines 37,025 35,690 Anzac Avenue property . 34,500 34,500 Mt. Eden depot 3,340 3,260 Newmarket depot 190 — Palmerston N. depot ... 1,900 1,850 N.Z. Govt, war loan 50,267 50,267 Waikato Carbonisation shares 25,000 25,000 Sundry debtors 11,341 9,995 Bank of N.Z. and cash on hand 7,13? 2,4G7 Total assets ...... 175,730 167,871 The company is not nearly so well entrenched' as was the case a couple of years ago. At that time its total assets .against the same capitalisatibn stood at just under £190,000, and they included a cash credit in the bank of over £37,000. From that handsome nest egg £25,000 was abstracted to pay for 23,000 shares in Waikato Carbonisation, so that Pukemiro Collieries are vitally concerned in the success of the big enterprise at liotowaro. However, the company still has a big surplus of assets quite apart from the carbonisation shares, and investors need have no misgiving as to its future. Officials declare that the mine has a life of from 20 to 25 years, and judged by their records in the past the directorate and management can be depended upon to make profitable use of their opportunities. In this connection it may be mentioned that the board has recently appointed its former secretary, Mr. Geo. Pollock, to the dual position of secretary and general manager. Now that the rate war between the Waikato companies has been settled by amicable agreement it is reasonable to expect that profitable trading will result. Investors have naturally written down the scrip .in accordance with decreased dividend rates,. but the shares still command a substantial premium. Values at September 1 in recent years have been as follow:—

£■ s. d. £ a. d. 192G ... 2 13 0 1929 .. 314 9 1927 ..320 1930 .. 2 10 0 1928 .. 3 10 0 1931 . 111 0 Based on the latest sale price and a dividend of 15 per cent, the return on outlay is a fraction over 9% per cent per annum. i