FACTS FOR INVESTORS.

Auckland Star, Volume LXIII, Issue 140, 15 June 1932, Page 4

FACTS FOR INVESTORS.

MORRIS HEDSTR.OM, LTD

SHARP FALL IN PROFITS. ORDINARY DIVIDEND 4 P.C. P.A. The 22nd annual report of Morris Hcdstrom, Limited, which has a paid capital of £739,613, states that during the year ended March 31 trading conditions have been very difficult, and at certain branches the> company has been trading at a loss. The net profit is £23,010. To this is added £45,790 brought forward from the previous year. After payment of interim dividends the amount available for appropriation is £52,415. The directors now recommend a final dividend of 3 per cent on preferential shares (£0570) and of 2 per cent on ordinary shares (£10,408), leaving £35,431 to be carried forward. The report states that during the year the value of stock and book debts has been reduced, and liabilities have been discharged. It is emphasised that this process of reduction of stock and book debts cannot be continued indefinitely, and the directors hope for and anticipate an improvement in business during the current year, which should mean that the capital of the company will be more fully employed in trading. The following items are taken from the accounts in recent years:— Net proiits. Dividends. Reserves. March. pref. ord. £ p.c. p.c. £ 192S .. . 72.502 0 7J 151.923 192 D ... 73,001 C 8 174,228 1930 .. . 70,375 0 8 192,719 1931 .. . 49,141 li (i 1(J7,(i15 1932 .. . 23,010 0 4 145.500 In 1930 the assets were written down £15,000 and in 1931 £20,000. Copra Prices Fall.

In his annual address posted to shareholders the chairman of directors. Sir Maynard Hedstrom, supplied much interesting information concerning the operations of the firm and its present position. "In March, 1928," he said, "we sold South Sea copra in bags at £27 per ton; in March, 1929, at £22 10/ per ton; in March, 1930, at £20 15/ per ton; in March, 1931, at £14 15/ per ton; and in June, 1931, at £10 10/ per ton. Early this year the market recovered, and in March we sold at £17 per ton; since then, however, the market has receded.

"In 1929 the copra exported from Fiji amounted to 33.226 tons; in 1930 to 23,882 tons; and in 1031 to 10,917 tons.

Financial Position. Between March 31, 1931, and March 31, 1932, the cash position or the company was improved by nearly £80,000, and for the first time in the history of the company cash in hand and in the bank, plus Government securities, exceeded the total of the company's liabilities. The following comparison of the cash position of the company on March 31. 1922, March 31, 1929, and March 31, 1932, is interesting:— Outstanding Cash on Liabilities. Hand. £ .C 1922 209,511 ost 192!) 145,370 1,190 1932 48,044 01,249* •Includes cash in bank and Government stocks. In effect the company has paid off liabilities during the last ten years of above a quarter of a million pounds, and during that time has paid dividends averaging over 5 per cent per annum. In March, 1922, the company faced a liability in excess of £14.000 per annum for interest; in March, 1932, there was a cash balance in excess of liabilities and practically no interest bill. < The following table shows the fluctuation in the value of the principal assets: — Assets. 1022. 1929. 1932. Freeholds and _ „ leaseholds .. 302,800 328,476 340,710 Floating stock and plant . . 19.05G 10,849 11.553 Produce and merchandise 210,590 341,418 IGS,9Bj Branches 212,400 129,445 94,437 Debtors 140,758 88,077 95,100 Investments .. 248,211 101,701 183,u13 1,133,917 1,090,010 894,703 The value of fixed assets has been increased since 1922 by the purchase o* business properties in Samoa and Fiji and the erection of new buildings in Suva. Outlook. "Prospects for the coming year," concluded Sir Maynard Hedstrom, "are more favourable than they were when I last addressed you. Perhaps the most important happening from the point of view

of this colony is the announcement made by the Chancellor of the Exchequer on April 19, reported in 'The Times as follows:—'With regard to colonial sugar 1 am proposing that during the next five years there shall be an increase of 1/ per cwt in the amount of preference to colonial sugar imported into this country, and in addition a special supplementary preference equal to 1/ on a limited quantity of colonial sugar, to be allocated by the Colonial Office.' This will stabilise our principal industry and to that extent brighten the outlook for the whole colony. Crop prospects also arc better Hie Colonial Sugar Refining Co., Ltd., will crush a heavy crop of sugar cane, estimated to produce about 100,000 tons of sugar. General rains throughout the colony have accelerated the recovery of the coconut palms and a steady increase in output may be expected from July onwards."