RECOMMENDED

Auckland Star, Volume LXX, Issue 99, 29 April 1939, Page 4

RECOMMENDED

BYCROFT SHARES. To those desirous of investing some portion of their surplus funds in local industries the shares of Bycroft, Ltd., flour millers and biscuit manufacturers, Auckland, can be recommended. These shares are valued on to-day's market at 38/ for the £1 scrip. Based on the usual dividend of 8 per cent per annum they show a return to the present investor of 4 1-5 per cent per annum on his outlay. In the present uncertain times, it is difficult to estimate in what degree particular companies may be detrimentally affected by Government legislation and regulations, but Bycroft's appear to be favourably situated in this regard. Working on a comparatively small bank overdraft they have no liquid funds that can be interfered with. The bulk of their capital is represented by property, buildings and plant, the whole of which is utilised in their extensive and expanding business.

When in 1036 the Government assumed control of the wheat and flour industry, Bycrofts suffered in common with others in the trade, but when this change was threatened the management very wisely redoubled its efforts to improve and expand its biscuit-making operations. Paid capital was increased by £2.5,000 to £125,000 and the company embarked upon an ambitious programme involving new buildings and new machinery. When the new plant, claimed to be as up-to-date as anything in the Southern Hemisphere, was ready for installation, the management took the opportunity to secure at a public gathering the presence of the Minister of Industries and Commerce, the Hon. D. G. Sullivan, who warmly eulogised the firm's enterprise. It would certainly appear that the operations of the company as a locally manufacturing I concern, are likely to escape any further I Government interference. ! Past Year's Profits. The earning power of the company is seen in the following figures, taken from the profit and loss account over a term of years: — NET PROFITS. £ £ 1924 ... 6,952 1932 ... 9,622 1025 .. . 9,481 1933 .. . 9,489 1920 .. . 9462 1934 .. . 10,505 1927 .. . 0,01(5 1935 .. . 10,800 1928 .. . 10,286 1936 .. . 10,79!) 1929 ... 10,55-i 1937 10,317 1930... 11,200 1938... 10,566 1931 .. . 10,830 The policy of the company appears to have been justified by results, for d/espite the loss of its flour and offal trade—it now acts purely as millers and distributors for the Government in regard to these lines—its profits have increased. At last annual meeting the chairman of directors, Mr. G. K. Hutchinson, said the company's excellent results were largely due to the fine spirit of co-operation "which animated the staff. He knew of no concern in which team work played so prominent a part as was the case with their company. The chairman also mentioned that when the building and plant j extensions, of which a substantial pro- i portion was already in use, were complete the output capacity of the factory would be increased a further 25 per cent. Under all the circumstances, it seems likely that Bycrofts have had a good turnover and despite increased costs may be expected to issue satisfactory accounts for the year that has just closed.