THE TOBACCO KING.

Auckland Star, Volume LXIII, Issue 288, 5 December 1932, Page 4

THE TOBACCO KING.

NAPIER CONCERN'S SUCCESS

MR. HUSHEER'S LATEST REPORT. INCREASED PROFITS; DIVIDEND 15 PER CENT. With amazing consistency the National Tobacco Company, which has ite headquarters at Napier, and as its presiding genius, Mr. Gerard Husheer, continues on its prosperous career. Earthquakes that shatter its factories; depressions that almost paralyse trade, have no noticeable effect on its profit-making abilities. During a period which has included the worst of the present slump the company hae made the record gross profit of £133,277, while the net returns, at £43,411, are only a little short of the record set up in 1930.

The National Tobacco Company was formed in 1923, with Mr. G. Husheer, who had had considerable practical experience while manager of a Hawke's Bay tobacco company, which went into liquidation after an exceedingly unprofitable existence, as the leading spirit. Quite early in its career the company made a vital move, namely, in transferring its headquarters to Napier, the location of Mr. Husheer's former enterprise. In its first year the company was able to pay 12 per cent to ordinary shareholders, as well as 8 per cent to the "preferences." It may be said that the company has never looked back, and abundant proof is furnished in the following table of results:-— Profits. Expenses. Div. Year. Gross. Net. Pref. Div. £ £ £ 1024 ... 2.051 10,405 S 12 1!)23 ... 1U,477 1i,335 9,704 8 12 1920 ... 22,202 8,252 .12,184 8 12 1927 ... 52,359 19,100 29,100 8 12J 1928 .. . 82,850 38,058 44,297 8 15 1929 ... 90,104 42,283 49,815 S 13 1930 ... 107,38(5 44,571 02,815 8 15 1931 ... 113,143 33,458 63,466 8 33 1932 ... 133,277 43.411 83,004 8 13

This is an impressive record and one which places the National Tobacco Company in the front rank of New Zealand industrial enterprises. In his review of last year's operations, Mr. Husheer says: "This has been a year of smooth running, no untoward event has marred our progress other than the general depression in trade and the diminished spending power of the smoker." Despite this, proceeds the report, "our sales have shown a slight advance over last year, and, although I am not at liberty to disclose the relative figures, you may gauge our turnover by the amount, of Customs and excise duties paid by us and which aggregates £225,000 for the year.

"Our profits may seem large, but they are the result of an immense output. In reality wo are working on a very narrow margin, so narrow that, if at any time we should be compelled to still further reduce our prices to the trade only by a fraction of a penny per ounce, there would be nothing left to pay a dividend with." Balance-sheet. Chief movements in the balance-sheet in recent years are shown as follow:— LIABILITIES. 1930. 1931. 1932. £ £ £ Paid capital ... 124,341 124,341 124,341 Reserve 65,000 00,000 110,000 Sundry creditors 6,153 0,370 7,431 Reserve for income tax ... • 30,000 33,000 38,000 Profit and loss account 40,096 30,690 45,210 ASSETS. 1930. 1031. 1932. £ £ £ Property, plant, etc. .... 45,506 58,713 54,337 Goodwill, patent • rights and trade marks 43,701 45,701 45,701 Stock 51,610 72,847 83,747 Advances on purchases .. 17,149 14,106 3,111 Sundry debtors 47,199 45,634 51,899 Bank 65,150 46,885 70,315 Foreign bal'nc's — — 11,306 Total assets .. 274,590 292,401 324,982 • Sundry debtors, it will be noted have shown a very large increase, and it is possible that the management, while pushing for turnover, has been over-liberal in the granting of credit. The company is steadily building up its reserves, but the balance-sheet is still disfigured by the item "goodwill, patent rights and trade marks," which first made its appearance in 1928, at the present figure of £45,701. Considering that Mr. Husheer has reserved to himself complete ownership of all trade secrets, it is difficult to justify the retention of this item. It is an intangible asset that was apparently brought forward for balancing purposes. On quite a different footing is the cash balance of £70,315, which is concrete evidence of successful operations and financial soundness.

Mr. Husheer's Share. By an arrangement made in 1928, Mr. Husheer received a bonus of 35,000 fullypaid shares. In addition he was to receive a salary of £960 per annum, as well as a commission of £1 10/ per cent on the gross value of all goods sold by the company until 1938. By the time he has collected dividend on the 35,000 shares presented to him, plus his previous holding, his £060 salary and the trifle of £1 10/ per cent commission on what he himself describes as "an immense output," his total receipts are more likely to be well over £10,000 for the year than under that figure. Even though, as Mr. Husheer suggests, tobacco growing in New Zealand has reached saturation point, and growers are being asked to curtail production, the "Tobacco King at Port Ahuriri" himself has little cause for worry on personal grounds.