FACTS FOR INVESTORS.

Auckland Star, Volume LXX, Issue 207, 2 September 1939, Page 4

FACTS FOR INVESTORS.

BROKEN HILL PROPRIETARY. CAPITALISING PREMIUMS. HUNT'S ISSUE EX PL AIX Kl). In the course of his address to shareholders at the annual meeting of Broken llili Proprietary in Melbourne, the chairman of directors. Mr. Harold Darling, explained tlie circumstances in which the proposed new issue of shares was being made. The chairman said: "1 he balance-sheet shows the sum of -4..T20.712 standing to the credit of share premiums, which premiums are the result share issues from time to time. (On the lull payment ot the last issue this figure becomes ,C 1.4,'"i0,790.) " lhe.se funds, representing as they do additional cash put into this large undertaking over and above the amount represented by the issued share capital of the company, have played a very important part, in the development of the steel industry; they have enabled a bold forward policy'of development to be undertaken with courage; without these there is no doubt that a very much slower rate o; progi ess would have taken place. The u hole ui the i'4.4~/O.TOO ha.s been spent in production plant, coal mines, steamers and equipment, and fully plays its part in the results being achieved to-day. our directors, in considering the capita! required lor the extension of the company s business, have had many discussions on the question of the price at which new shaies should be issued. They have considered the advisability of par issues or a smaller issue at a premium. I lie\ have lelt that the best interests ot all concerned would be served in the long run by the latter alternative, and. as you know, when new capital has been required shares have been issued at a premium.

"there appears, however, to be a genernl misappt ehension b.\ the. public about the peiceiita'j,,' or profits on capital being made by tlu» company. This is exaggerated I)v I lie fart that most of the company s pharos have boon issued at a substantial premium, ami thus the shareholders haw subscribed more in rash to the funds of the eTnnpany than is shown in subscribed capital. "The total amount of these premiums now amounts. as I have said. to .L'4.4.Y>.7!>0. and. as this amount has been actually subscribed by the shareholders in cash. \ our directors have decided that it is desirable to issue shjyes for approximately a like amount. This will work out at about. Gl shares for each 100 shares now held. Your directors are considering the steos neeessaiy to give effect to this

' Since no part of this issue would come out of pa.-t profits, it. would not be a bonus i-sue in the ordinary sense of the term. You will recognise that it will not ena.ble the comnan.v to earn any larger amount of profits, and that no greater amount will thereby be rendered available dividend purposes. ''I'm ther particulars will be advised to shareholders in due course." G. J. COLES AND CO. AN EXPANDING BUSINESS. LAST YKAR'S RKCOPvD PROFIT. As already notified in these columns the Australian chain store organisation, (m .T. Cedes and Company, earned record profits for the year ended June 30, earnings amounting to L'2.V>,301. Details from the last two balance-sheets are as follow: - I.IARII.ITIKS. Year Kiided June .10. in.is man. e £ | Capital - Preference 1 ."0.000 1.")0.000 (trilinar.v 1 .nTii.-jr,/, 1.0'.i4..-,-js j Reserve 201 I 243.334] l'rovisuni for income lax 7 I.nor, 01.057 i Premium on shares reserve I.YI.SOC, 154.800 Freehold depreclation reserve 100.7.1.". 120,070 Creditors U7..1!i2 1 Employees' super- • animation 5,010 0,295 employees' savings tuna 22,802 31,290 ASSETS. Freehold ('.00,700 SSS.SOO I.easeholil 217.757 L! 52.917 Fixtures, plant ... .'!21.5."2 ,'l7-S 40~i Stock 510,205 532,*514 I liiroslmcnts ir> 1.-, | Debtors 1.1,072 10,875 231,7!)5 00,193 54,000 54.000 Dividends at the rate of 8 per cent <ui the A cumulative preference shares and at, the rate of 18% per cent on orclmniy shares required a total of £"213.800, leaving a balance of £42.000, which has been Ir.inslerred to general reserve. In addition. £10.34.1 was added to freehold depreciation reserve. In April of this year the directors announced an issue of 21.V2.50 ordinary shares, at £1 each, payable in July, 1930. and January. 1040. When this issue is fully paid up capital will amount to £1,441,515. Past Years Compared. r l he following table gives records from the returns since 1030;- - Dividends profit. ord. Krsprvo ~ !».(*. £ 78.057 I'Ji 43.000 1931 (10,9 14 1(1 50,25 1 1032 50.535 10 74.789 1033, 104,135 It) 354.440 1 109.777 lo 180.800 ! 1 31.444 1 2 \ 248.1 11 3030 154.851 12' i 242,450 223,400 IS!J 491,484 1 n.'S 243.100 17 i 454,705 255,301 ]8:J 515,009 Ihe 150,000 preference shares carry a dividend of 8 per cent. Ihe outstanding feature of the latest i accounts is further marked expansion and consolidation of the business, which is spread throughout metropolitan and country centres in all the Australian States. During Uie year 10 new stores were added to the chain, making the total I 80_. Of the 16 eight were in Xcw South Wales, four in Victoria, two in Tasmania and one each in South Australia and I Y\ est Australia. I here was some remodelling and extension of existing stores I chiefly in Melbourne and Svdnev. ami I reel i olds were bought in Rundle Street Adelaide, "and in Adelaide Street. Brisbane, the price mentioned being £155.000 and £50,000 respectively. Remodelling and extension of the Little Collins Street. Melbourne, store, is expected to cost I between £00,000 and £70,000. |