COMPANY NEWS

Press, Volume LXXXV, Issue 25932, 12 October 1949, Page 8

COMPANY NEWS

BOOTH, MACDONALD’S YEAR RECORD TURNOVER An increase, in net trading profit from £27,913 last year to £32,511 is recorded in the accounts of Booth, Macdonald and Company, Ltd., for the year ended June 30. The turnover for the year was a record. After the deduction of taxes the , balance of profit is shown at £13,811. 1 Dividends of 5i per cent, on the noncumulative preference shares and 5 per ; cent, on ordinary shares absorb £7785 and, to the balance of £6026, is added the I accumulated balance of £22,634 from the 1 previous year. The balance carried forI ward is thus £28,660. I The gross profit for the year was £104,063, against £86,576 for 1948. Ex- ' penses, including depreciation, totalled j £71,552. against £58,663 for 1948. The directors note that the continued expansion of the Ferguson Tractor | Agency is a matter of considerable importance and has resulted in increased I activity in the South Island. During the year the company established its own office in Wellington. Offices were also opened in Clyde and Balclutha. | The balance-sheet is as under:— Liabilities » 1949. 1948. I Subscribed capital .. 142,478 142,478 i Reserves .. .. 43,104 37,073 I Sundry creditors .. 20,939 17,733 Provision for taxes 21,167 18,260 Bank debenture and mortgages .. .. 147.032 101,642 Dividends .. .. 7.785 5,285 £382,505 £322,476 Assets 1949. 1948. £ £ Fixed assets, comprising properties (less mortgages), plant, fittings, etc. . . 120,730 109.618 Cash .. .. 237 126 Investments .. .. 574 1,633 I Bills receivable .. 15,958 6,702 I Sundry debtors (less i res.) .. .. 56,719 38,430 Stocks .. .. 188,287 165,967 £382,505 £322.476 WHAKATANE BOARD MILLS’ AFFAIRS “ HAMPERING DURDEN OF TAXATION ” The hampering burden of taxation was referred to by the chairman of directors, Mr G. 11. Mackley, in his address to shareholders at the annual meeting of Whakatane Board Mills, Ltd., at Wellington, yesterday. “Taxation for the year under review will." he said, "absorb £79,750, while the profit available for appropriation after tax is £57,741. Of the latter amount, shareholders will receive £47.431. if the recommendation of the directors regarding payment of dividend is approved. On the basis of our gross profit, for the year, as shown in the accounts. Government taxation will claim 32J per cent, of the amount and shareholders will receive 19 "Bearing in mind that the Government has not provided one penny of live capital required to earn its share of the profits, has not accepted any of the risks associated with the undertaking, lias not done anything to make the project possible, but has in some respects made it difficult tor the project to reach its present stage of development. its claim to such a largo proportion of the profits at the expense of the shareholders is wh'.»lly untenable and unjustified." “Short-sighted Policy” Reverting to the subject after referring to various phases of the company’s activities. the chairman said: “The hampering effect of a short-sighted industrial national policy is exemplified in the figures for the 10 years, 1939, when we commenced operations to 1949. Gross profit amounted to £1.537.316; taxation, including provision for the current year, absorbed £439,130, or 28.56 per cent, of the gross profit, whilst the dividends Io shareholders, inclusive of the current year's proposal. amounted Io only £122,223, or 7.95 per cent. In addition to the above, the State has benefited by our payment Io il of £650,702 in railway freights, by the | payment of £1.339,265 in wages,’ and £260,487 for coal. "For every £ 1 gross of sales for the year, the shareholders will receive by way of dividend Is Id. the Government in taxation Is lOd, wages and salary workers 4s .2d, suppliers of raw materials 6s 4d, manufacturing and distribution costs 6s sd, balance forward 2d. The imposition of a tax which absorbs Ils 6d out of every £1 of net profit at a time when, to quote the Budget of 1949, ‘Economic activity is at a level higher Ilian ever before,' and after several years of post-war experience. cannot, be fairly justified. "However, live policy and intention ol (he Government is clear. If in a year ol unprecedented prosperity it finds itself unable to reduce the burden of taxation, then the probability of any relief in fuI lure years appears to be a forlorn hope. I A policy of high taxation must inevitably tend to increase costs, destroy incentive, and discourage development and expan[GENERAL ELECTRIC CO. LTD., OF ENGLAND CHAIRMAN’S SPEECH “The immediate industrial outlook is I anything but bright," said the chairman of the General Electric Company, Ltd., of England (Sir Harry Railing), at the annual general meeting of the company I held at London on September 29. "1 am ■ not referring to this company," lie continued, "but to British industry in general. j World demands are still unfilled, but purchasing capacity of individuals and in- ! dividual units is limited, and therefore I the expansion of order volume. The need, all the world over, is for increased j production of values and thereby for the creation of new demands. In the absence | of a satisfactory increase, our greatest i immediate necessity in Great Britain is | to obtain orders for a larger percentage of the existing world demand. Only if we succeed in doing so can we pay for food and raw materials and maintain our standard of living. If we fail, it is bound to deteriorate.” Referring to the affairs of the company, the chairman said:—"The net profit, though less than in previous years, is considered satisfactory. We state that fluctuations in demand and the return to competitive conditions naturally tend to a reduction of profit. In previous years the constantly rising costs of raw materials, wages and services could be recovered in increased sales prices, because the demand both at home and abroad exceeded the supply. During the last year, especially the latter part, it became evident that further price increases would have resulted in a reduced volume of orders and therefore we had to choose between increased turnover with smaller profit margins or a reduction in output and productivity. In the interests of our long-term policy to maintain and expand our markets at home and abroad, we chose the former. "It is obvious that an industry like ours must both plan for, and be judged by. its overall long-term performance. We can neither plan nor be judged on a yearly basis. Incidentally, this is a reason why governmental price and profit investigations covering a particular period and a specific article are so often completely misleading and unfair, unless the place of these products in the development of the whole industry, their actual part, and probable future development, and the attendant costs and risks are taken into consideration. “The results achieved during the last year could not have been obtained without an increase in the turnover of the company. Our total turnover exceeded that of the previous year. It increased in capital goods both at home and abroad. ; both in the power field and in the field I of communication. In the field of conI sumer goods it increased abroad, but a : contraction took place in the home marI ket mainly on account of the inadequate • expansion of electricity supply, and the , high purchase tax which is imposed.” After reviewing the successful operations of the company the chairman said: ' "Summing up, the only way to maintain , our standard of living is greater produc- j tion. The prerequisite for greater production is a greater volume of orders at home, and more especially from abroad. This cannot be achieved unless prices ( can be reduced or kept low. It is clear , that prices can, in the main, only be re- ■ duced by three measures, longer or more I effective man hours per year, maximum • machine hours per year, and the supply . of the most modern equipment, which in turn depends on the lowering of taxation j on retained profits. These measures must be accompanied, and can only be carried : out, by cutting all national and industrial expenditure which is not absolutely ■ essential and which, however desirable • in itself, we cannot afford at the moment. ' At. present some 40 per cent, of the total ; national income is taken by the Government. This compares with 25 per cent, in the United States. America is there- , fore? left with 75 per cent, of its national , income for either consumption goods or • capital formation, whilst we in Britain have only 60 per cent, available for both It is evident that we must raise this percentage and increase the margin which is available for capital formation and conI sumption, and it is equally evident that | this can only be achieved by reducing . both our national overheads and our industrial production costs in private and in nationalised enterprises. Unless this is don--, present private consumption and present State services cannot both he maintained. As a nation we must earn more and spend less. “The revolution of our currency which , has taken place since this address was i written has only added still further weight I to all the arguments I have put forward 1 and to the extreme urgency for the steps ■ recommended. They are vital if we are

to gain any benefit from revaluation. They are essential if we wish to prevent further inflation.” [The General Electric Company, Ltd., of England, known throughout the world as the G.E.C., is represented in New Zealand bv British General Electric Co., Ltd., Wellington, Christchurch, Auckland, and Dunedin. The consolidated accounts of the General Electric Co., Ltd., show that the capital employed, at March 31, 1949. amounted to just over £25,850.000, and that the profit for the year to that date after taxation amounted to approximately £1,487,000. The dividend on the ordinary capital is 10 per cent., plus cash bonus of 7J per cent., both less income tax for the year. The company has over 54,000 employees.] (Extended report published by arrangement.) South Island Finance.—Net profit of the South Island Finance Corporation. Ltd., rose from £IO2B a year ago to £l3Bl for the 12 months ended August 31, 1949. Profit is struck after providing £636 for taxation, against £4Ol in the previous year, and is won from £5076 earned in interest against £3596 in the previous period. Capital was increased during the year, the paid-up figure now standing at £24.800, against £11,780. Final dividend of 3 per cent., making 6 per cent, unchanged for the year, is augmented by a bonus of 1 per cent, from reserves (2 per cent, a year ago), total distribution requiring £986, compared with £799. Carry forward will be £ISOB. against £lll3 brought in. Directors report that demand for advances has risen rapidly and that total bills held, less reserves, are £45,961, against £27,499 a year ago. George Court.—Net profit of £30,760, which was £1856 above the previous year, was reported at the annual meeting yesterday of shareholders of George Court and Sons, Ltd. The chairman (Mr A. J. Court) said by clearing all doubtful lines at reduced prices last year the company's department store this year experienced a longer period of trading at norma] prices. Whereas gross profit at £207,297 had reached a higher level than last year, expenses had also increased because of higher wage costs. Directors recommended maintaining the dividend at 10 per cent., leaving £15,760 to increase the carry-forward in the profit and loss appropriation account to £177.122. Stock in hand and goods in transit totalled £183,281. The directors recommended an increase of capital to £250,000 by the creation of 100,000 ncv\ shares to be paid lor by the declaration of a bonus dividend of 13s 4d a share.— (P.A.) Dominion Rubber Co.—Production for September was 50,0001 b