DECLINING PROFITS. AUSTRALIAN COMPANIES.

Press, Volume LXVII, Issue 20381, 30 October 1931, Page 12

DECLINING PROFITS.

AUSTRALIAN COMPANIES.

When the world-wide depression first descended upon Australia, the profits of those companies engaged in primary industries and export businesses were the first to be seriously affected by the very sharp decline in overseas commodity prices, says the Monthly Review issued tor October by H. Byron Moore, liiiy, and J-'ourneaux, the Melbourne sharebrokers. The next class to be aileeted were those dependent upon import, trade and luxury lines. High tariff walls were created which made the landed cost so prohibitive in Australia, that the reduced spending power of the public was incapable of paying the increased price demanded. The last to feel the full blast ol' the depression were probably retail businasses and local manufacturers. The former were onlv affected to the extent of the decline in national income, which was comparatively a gradual process, whilst tbo latter were assisted by protective tariffs and reduced costs. After a period of two years we have now reached a stage where every biancli of industry is showing reduced earnings, and in many instances heavy losseis are being incurred. Production costs have been reduced to the minimum allowed by arbitration awards; overhead expenses are nominally lower, but taxation is a burden which is almost crippling enterprise and certainly offering no inducement for tho employment of capital. In the accompanying schedule there is set out the net profit of some of the principal Australian companies after paying or providing for preference div idends, and there is also shown the rate of ordinary dividends paid during the past three years. In practically every instance dividends have been reduced, somo have been passed altogether, whilst not one company has :ule an increased distribution. Altogether there are included sixty individual companies covering practically every branch of industry, as well as banking and financial institutions. The list is fairly representative, and by summarising the results of each year a fairly accurate idea can be obtained of what the present world-wide depression has meant to investors in Australia. Apart from capital losses .disclosed by Stock Exchange quotations, dividends have been considerably reduced, and the present return on the capital outlay, eliminating reserves, is small in comparison with the position a few years ago. The summary below discloses that the biggest decline in net profits has taken place in the last twelve months. Percentage of net_ profits declined during that period from 11.73 per cent, to 7.72 per cent., whilst dividend distributions have similarly declined from 9.53 per cent, to G. 02 per cent. 1928-29. 1929-30. 1930-31. JC £ A Total ord. capital .. 5-1,199,y6J Dj.641,'38i> ?5,8K2,05G Net profits after . preference dir. 7,400,390 6.526.9*t 4,813.664 Percentage net profits to ord. capital .. 13.7R 11.73 7.72 Av. ord. dir. sixty companies 10.90 p.o. 9.53 p.c. 6.02 p.c.

WOOL SALES IN SYDNEY

A KEEN DEMAND. (ISIIID JfJISSa ASSOCIATION —3S ELXCTJtIC TSLBOHA.PH— COPYRIO3T '1 (Received. October 29th, 9.3K p.m.) SYDNEY, October 29. At the tv'ool galea 11,420 bales •were offered and 10,771 were sold. A.lso 673 bales were disposed of privately. There was a particularly keen demand for the finer types, Continental buyers being the chief operators. Values were at the best point for the week. Greasy merino made to ns<\. MEAT EXPORT CONTROL ACT. MR LYSNAR'S AMENDING MEASURE. AS4OCIATZOS TILBOiUIt > WELLINGTON, October 29. Some criticism of Mr W. D. Lysnar's proposed amendments to the Meat Export Control Act was made in a letter received by the executive of the New Zealand Farmers' - Union to-day from the New Zealand Meat Producers' Board. Delegates to the Board had passed a resolution recording strong disapproval of a private member of Parliament introducing a Bill to amend the Meat Export Control Act without it first being submitted for consideration to various organisations representing the sheepowners of the Dominion. The delegates further expressed their confidence in the present constitution of the Board. The Farmers' Union was asked to support those views, and the meeting passed a resolution on favourable lines. Mr W. Morrison moved: "lhat this executive views with alarm the fact that freezing works in the Dominion are being bought up by large proprietary firms, thereby creating a monopoly." He said there was a danger that the freezing works would ultimately be held by one or two companies throughout New Zealand. Within the past ten or twelve years some of the weaker companies had been absorbed by the stronger ones. One member spoke of the reduction in overhead costs, which had been brought about on the East Coast by the freezing works beina; brought under one control. The remit was carried, and it was decided to ask the Meat Control Board to make no levy this year, as the reserve appeared to be sufficiently strong to obviate the necessity for the levy.

COMPANY NEWS. CARLTON BREWERY. The directors of Carlton Brewery, Limited, of "Victoria, have declared an interim dividend at the rate of 8 per cent, per annum for the half-year ended June 30th. Interim dividend in the previous year was 53 per cent. BURNS, PHILP, AND CO. Burnß, Philp, and Co., Ltd., Sydney, haw declared an interim dividend at the rate o£ 10 per cent, per annum. FLTTENZOL PROPRIETARY, LTD. Directors of Fluenzol, Ltd., Wellington, report for the year ended September 30th, that "the year has been a trying one for this and all other businesses, and greater concentration, more scientific marketing and advertising methods have been necessray in order to present satisfactory results. Notwithstanding the depression, however, we have pleasure iu recording that sales have increased by 14.7 per cent. Profits also are extremely satisfactory, and the products of the company are meeting with increasing public favour and goodwill. The net profit for the year amounts to £1430 4s 9d after providing for adequate depreciation on plant, motor-car, and buildjngs, and for reserves for bad debts and discounts. Of this amount, income tax amounting to £203 Is 4d has been allowed for, and £7OO has been written off goodwill, reducing that account to £IOOO. The balance of £587 12s 8d now remains in appropriation account, and it is recommended that a dividend of 8 pev cent, b* paid, absorbing £440.' '