FACTS FOR INVESTORS.

Auckland Star, Volume LXIV, Issue 112, 15 May 1933, Page 4

FACTS FOR INVESTORS.

TAUPIRI CCAL MINES. INCREASED PROFIT LAST YEAR. COAL INDUSTRY PROBLEMS. Net profits of the Taupiri Coal Co. for the year ended March 31, were over 2\i times greater than for the previous term, but are still less than half of the earnings in each of the previous six years. Useful comparisons will bo found in the following table: — Credit from Year foal Net Dividend ended Reserves, acct. pmlit. pre!', ord. Mar 31. £ £ £ p.c. p.c. 1023 ... 17.000 30.576 12,600 8 <1 1024 ... 18,052 25.011 11,628 8 7J 1025 ... 18.357 20,513 11,180 8 7J 1920 ... 10.000 21,413 13,03(5 8 8i 1027 ... 23,150 25,315 111,010 S 10 102S ... 27.025 27.074 15.507 8 10 1020 ... 20,702 25,007 10.370 IS 10 1030 ... 31,20(3 23.081 15,820 8 10 1031 '. .. 31,233 21,052 13,330 8 10 1032 ... 21,541 0,032 2,100 8 5 1033 .. . 10,533 7,700 0,343 S 5 It will be noted that gross profits last year were about £1000 above, those earned in the previous term. However, expenses in various forms have been cut down, with the result that net profits show a substantial increase. The following table shows variations in the expenses items over the last three years: — 1031. 1052. 1033. £ £ £_ Coal miners' relieC .. 335 206 171 Insurance 3.517 3.478 2,275 General expenses ... 1,570 1,335 1,280

With reduced earnings the company, after cutting down expenses, has had to curtail its distribution* to shareholders. For live years to 1931 this amount was £14,600 annually; lor the year just closed the amount is £7783. In order to maintain the payments made in the last two years the management has had to draw on reserves to the tune of £7000, of which only £1400 was in connection with the latest accounts. However, the company is in a sufficiently strong positionto adopt this policy without seriously impairing its financial standing, as will he seen by the following balance-sheet items, the last three years are given for purposes of comparison:— LIABILITIES. Mar. 81, Mar. 31, Mar. 31, 1931. 1932. 1933. £ £ £ Paid-up capital .. 150,000 150,000 150.000 Sundry creditors . 729 4,134 4,954 Accident reserve fund 11,000 11,000 11,000 Provision for income tax 7,000 3,000 2.430 Dividend equalisation 3,000 5.000 5.000 Bank — O.ull 1,104 ASSETS. Freehold & leasehold land, buildings, machinery, and plant 81,310 50,277 50.955 Mortgages 12,313 11,742 10.S1S N.Z. War Loan investments .. . 52,144 50,403 46,033 Shares In Waikato Carboiiisa t i o u Ltd 25,000 25,000 25.000 Debentures — 9,750 9,750 Shares in South British — 1.710 — Sundry debtors . 9,461 9,253 8,771 Cash on deposit at call 0,500 — — Bank of New Zealand 1,734 20 164 Open liabilities, which had increased from £729 in 1931 to £10,000 in 1932, have been reduced by £4900. The present total of £6000 need cause shareholders lio uneasiness; they loolc small when set alongside the substantial assets that are on view.

The reduction in liabilities is offset by a curtailment of New Zealand War Loan Investments and the disappearance of £1740 worth of South British shares. The latter were presumably sold at a handsome profit. Land, buildings, machinery and plant in mining concerns are usually considered as wasting assets, but the Taupiri outfit has always been kept up-to-date, and the coal reserves are so great and so easily accessible that the rate of depreciation may be adequately provided for in the allowances made from year to year.

Concerning the investment in the Waikato Carbonisation Company shareholders will probably expert to hear something at the annual meeting. A year ago the chairman of directors and Colonel Holgate both spoke fully on this matter, and it will be interesting to hear at first hand of the latest development.? concerning this important enterprise which means so much to the coal industry in the Waiknto. Doubtless, too. tiie directors' report will make reference to the "wasteful competition" which was blamed for the small profits earned in .1931, and which, so far as can be judged, continues with undiminished vigour.