COMPANY NEWS

Press, Volume LXXIV, Issue 22429, 16 June 1938, Page 13

COMPANY NEWS

N.Z. BREWERIES CHAIRMAN’S REVIEW OF OPERATIONS SATISFACTORY YEAR REPORTED .PRESS ASSOCIATION TELBORAU.) WELLINGTON, June’ 15. “The company has shared in the general prosperity experienced throughout the Dominion, and aided by favourable seasonal conditions, we are able to record the highest yearly output since the company was formed,” said Mr D. W. Madden, chairman and managing director, at the fifteenth annual meeting of shareholders of New Zealand Breweries, Ltd., to-day. “This must be considered satisfactory, particularly in view of the keen competition.

Throughout the year the company’s trading had been carried out under exacting conditions, said the chairman. There had been heavy advances in the prices of all raw materials and in operating and labour costs and charges generally, and there was evidence in this respect that the limL had not yet been reached. Last year the directors indicated the necessity of conserving and expanding the company’s trade by making investments in hotel properties by way of purchase and otherwise. This policy had been continued to a degree, and included in the purchases were hotel properties formerly owned by J. Staples and .Company, Ltd. Referring to the offer of new capital made during the year, the chairman said the offer, in terms of the article of association of the company, was confined in the first place to existing shareholders. Out of 546.135 shares offered. 543,108 shares, equal to 99.45 per cent.; were taken up at a premium of ss, a share. The directors decided not to issue the small number of 3027 shares not applied for. The success of the new issue must be regarded as most satisfactory, and a reflection of the shareholders’ confidence in the .stability of the company, and the policy of the directors. The proceeds of the new capital issue had been absorbed, and were employed in the company’s business to cope with the demands on the company’s manufacturing facilities, and to provide for the necessary additions and alterations to both premises and plant, some of Which had been left in abeyance during the difficult years.Expenditure oh Breweries

Substantial expenditure had been Incurred at the various breweries and bottling-houses, and the complete rebuilding of Speights brewery was now •well in hand. The Hotel Waterloo. Wellington, was completed and opened last October. The accounts showed a gross profit of £1.351,143. and after deducting distribution costs and general expenses, and providing for depreciation, taxation, and contingencies, and the paying of £698,968 in beer excise, there remained a net profit of £130,697. This was an increase of £38,138 on that for the previous year, and reflected in part the benefit the company had received from the earnings of the additional capital , employed during an appreciable portion of the year. The amount brought forward from last year was £25,710. which, added to the net profit for the year, made £164,408. An interim dividend at the rate of 4 per cent, amounting to £65,454, was paid during the year, and the directors now recommended >a final dividend at the rate of 4i per cent, (making in all 8i per cent, for the year). This dividend would absorb £73,592, and there would remain £35.401 to carry forward to the new year’s accounts. Each of these dividends had been calculated on the basis of the new capital having been paid over the whole year, whereas only part of this capital was revenueearning over the whole period.

The Balance-Sheet

The balance-sheet figures showed considerable variation consequent , upon the’ increase in capital and the expansion of the company’s business. Land and buildings stood at £1,213,539, and the increase of £660,455 was represented to a large extent by the purchases of hotel properties. It was_ the intention of the directors to reduce the book value of land and buildings to £135,777, being the amount now standing to the credit of the share ' premium account. . , Additions made to machinery and plant during recent years had caused, a steady increase to £148*168, or £44,678 higher than in the previous; year. Stocks on hand at £245,077 were £82,861 above last year. The company’s increased turnover .and further increases in the prices of raw materials, together with unusually heavy deliveries of the new season’s _ barley crops, had affected the quantities and values of stocks. Extra purchases and higher prices had also increased advances to barley and hop growers by £5319. The value of furniture and fittings and hotel assets had increased by £41,833 and stood at £51,012. This increase was to a large extent concerned with the Hotel Waterloo. Investments and advances to the trade at £556,516 showed a comparatively small increase of £14,808 on last year’s figures. The amount owing on current accounts was £237,096, which was £45,793 in excess of last year’s total, and reflected the increased sales. On the/liabilities side of the balance- , sheet the capital account now stood at £1,635,379. Sundry creditors had increased by £40,610, and the amount owing under this head was now £190,010. Amounts owing to properties purchased and secured under mortgage had increased by £20,312, those liabilities now totalling £50,785. The directors deemed it advisable to add £IO.OOO to the taxation reserve account, bringing it up to £900,000, . and the usual addition of £SOOO had brought the insurance reserve up to £55,000. The general reserve account remained at £115,000. The credit balance with the company’s bankers last year Was £17,141. This year they

had an overdraft of £lOO,llO. The difference in the position of the account, £117,251, had been required in connexion with the general expension of the company’s business. WOOLWORTHS BONUS ISSUE Official quotation has been granted on the Australian Stock Exchanges to 742,668 ordinary shares of 5s fully paid, recently issued as bonus shares to shareholders in Woolworths_ (Sydney). These shares rank equally with the old ordinary shares for dividend.