THE TOBACCO KING.

Auckland Star, Volume LXIV, Issue 285, 2 December 1933, Page 4

THE TOBACCO KING.

NAPIER CONCERN'S SUCCESS. MR. HUSHEER'S LATEST REPORT. LOWER PROFITS; DIVIDEND 15 PER CENT. With amazing consistency the National Tobacco Co., which has its headquarters at Napier, and as its presiding genius Mr. Gerhard Husheer, continues on its prosperous career. For the year ended Octobei 31 profits are lower than for the previous term, but they must still be considered eminently satisfactory inasmuch as the directors are able to again recommend the ■payment of dividends at the usual rates, namely, 15 per cent,to ordinary shareholders and 8 per cent to preference. Besides this the directors propose to transfer £20,000 to reserves.

The National Tobacco Co. was formed in 1923, with Mr. G. Husheer, who had had considerable practical experience in Hawke's Bay, 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 veal" 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 ot

This is an impressive record and one which places the National Tobacco Co. in the front rank of New Zealand industrial enterprises. Yet Mr. Husheer is far from, satisfied. In his annual report to toe presented to shareholders at the annual meeting on December 14 he says:— "This has been a year of many disappointments and difficulties, and not the least of them has been taxation. The commodity in which we are dealing is taxed up to the hilt. The excise duty has reached the staggering figure of 4/0% per lb. This is the penalty we have to pay for having introduced a new industry. Whole districts have actually been saved from ruin, and thousands of farmers are depending for their living solely upon the returns from their tobacco crops. And the manufacture of the raw leaf keeps hundreds in employ who otherwise might have been on relief work. What has been our reward? No encouragement of any kind, little or no protection against foreign dumping. Ready manufactured cut tobacco from abroad is admitted into New Zealand at the rate of 6/10 per lb, while the local manufacturer has to pav 4/0% in excise duty alone, and another 2/6 Customs if he uses foreign leaf, thus a total of 6/6%, which means that he enjoys a preference of 3%d per lb. We are just tolerated and no more." Mr. Husheer then proceeds to blame the Agricultural Department for misleading growers, as a result of which they produced large quantities of unsuitable leaf, which proved unsaleable and helped to depress the market. In addition, he blames the Department for manufacturing tobacco for use in prisons and mental hospitals, thus competing with private enterprise.

Balance-sheet. Chief movements in the balance-sheet in recent years are shown as follows: — LTABIT/TTIES. 1031. 1932. 3 933. £, £ £ Paid capital ... 124.3-11 121.311 124.3-11 Reserve 90,000 1 in,ooo 130.000 Sundry creditors 5,370 7,431 • fi,686 Reserve for Income tax .. . 33.000 35,000 41,000 Profit and loss account .... 39,690 45,210 4-,339 ASSETS. 1031. 1932. 1933. £ £ £ Property, plant, etc 08,713 54,337 61,034 Goodwill, patent rights and Irade marks 45.701 45.701 4i.i,<01. Stock 72.547 83.747 110,259 Advances on purchases ... 14.166 3.111 900 Sundrv debtors 45.034 51.899 4(.26.> Bank 46.885 70.315 75.000 Foreign balances — 11.306 1,858 Total assets . 202.401 324,952 343,360 The financial strength disclosed above is impressive, despite the fact that the sheet is still disfigured by the item of £45,701 goodwill, which should have been wiped out years ago. Stocks are very heavy, and suggest reduced trading during the last part of the year. Reserves are now substantial, and £75,000 in the bank at balancing time is a cheerful feature. It will be noted that the property account has increased. The report says: "Further additions have been made to. the new factory buildings, including spacious offices, erected in steel and reinforced concrete, practically all earthquake proof, and the property held by the company, including plant and machinery, _ now amounts to £61.033 12/ after writing off £4570 16/11 for depreciation."

results:— Profits. Expenses. Div. Year. Gross. Net. I'ref. Ord. £ £ £ 19"t . 12,545 2,081 10.405 8 12 1925 . 10.477 0,335 9.704 8 12 1920 . 22,202 8,252 12.1S4 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 8 15 1930 . 107,380 44,571. 62,815 8 15 1931 . 115,143 33.45S 03.400 S 15 1932 . 133,277 43,411 S3,004 8 15 1933 . 129,048 35,020 90,051 8 15