SMALLER NET PROFITS

Auckland Star, Volume LXXI, Issue 196, 19 August 1940, Page 4

SMALLER NET PROFITS

' FACTOR OF HIGH TAXES. ACTUAL TRADING BETTER. DIVIDEND OF 5 PER CENT. Profits amounting to £32,763, a decrease of £10,100, were earned by Wright, '. Stapheneon and Company, Ltd., for the ' year ended June 30. The report states Q ,«hat the commissions and trading profite, r after providing for depreciation and general S expenses, were greater than laet year, but r owing to the exceptionally 'high taxation e and in a smaller degree to increased 0 general expenses, the net return to ehare--1 holders is less than last year. Gross earnings, the report added, showed an increase 1 of £64,138, compared with the previous 1 year. g The raising of income tax on prior lien debenture stock, of which t)he company . held £231,386, to 8/9 in Uhe £, plue 15 M per cent, 'had resulted in increased taxa- _ tion of £2843 in thk category. Ordinary income fax had increased to the maxit mum company rate of 8/9, plus 15 per cent. 3 The profit and loss account, including ~ £58,296 brought forward from laet year, ehowe a credit balance of £91,059, from i which has (been jpaid the interim dividend ~ for the pix months ended December 31, a 1939, amounting to £13,127. Thia leaves . £77,932 available for distribution. Out of i that sum the directors recommend, after r making provision for the fixed payment of 1 2Y* per cent for bix months on the prefer--1 cnee shares, a final dividend of 2% per cent should be paid on the ordinary i shares, making o per cent for the year. , This leaves a balance to be carried for- . ward of £64,804, compared with £58,296 j 'brought in. j Balance-sheets Compared. 1 Movements in the balance-dheet com- } pared with last year are:—

s LIABILITIES. i Variation. i £ £ > Capital 550,082 Same General reeerve 28,13 a Same Profit anO loss approp. 77,932 —9,128 Debenture stock 693,090 —6,642 Fixed deposits 93,526 —*,952 Owing to subs 204,950 -f 62,4»0 Clients' current accounts 448,174 +36,735 Creditors 342,155 +40,764 Bills payable 9,633 +5,661 Staff pensions 63,723 +8,781 Bank — —5,478 - P. and L. account ..... 77,982 —9,128 ; ASSETS. J Property and plant .... 254,376 —«,836 • Invest, in subs and assoc. D companies 406,686 +3.184 1 Stocke 264,510 +18,515 Advances (produce) ... 38,479 —27,511 ; Advances accounts 818,982 —171,354 1 Debtors 328,564 +13,865 Bille receivable 75,125 —38,801 Advances to directors .. 2,890 --4,023 ' Investments 40,003 —2,881 Cash in hand & on dep. 281,782 +268,606

The balancing total at £2,511,39? Ie an increase of £54,764. A memorandum to shareholders eete out the trading position of the company clearly, and at the eame time gives the policy of the company. It states that the directors consider the provision and maintenance of reserves a necessary precaution, particularly during a time like the present, when eo many markets are abnormally high. A fall in prices muet come sooner or later. A new item in the assets thie year was cash oh deposit at .short call, £235,426, wihich represents a temporary investment of surplus caeh, created mainly by the reduction in sundry debtors' advance accounts.