Company News Wright Stephenson Profit Falls

Press, Volume XCVII, Issue 28701, 26 September 1958, Page 12

Company News Wright Stephenson Profit Falls

(Neifl Zoalana Press Association) WELLINGTON, Sept. 25.

Wright Stephenson and Company, Ltd., made a consolidated net profit of £408,278 for the year ended June 30, £15,866 down on the previous year. This was after providing £296,304 for depreciation (up £66,199) and £483.740 (down £59,506) for taxes. With tax and depreciation provisions, total expehses were £947,765 (£909,318).

Group earnings after general expenses and bad debts were £1,310,081 against £1,291,404 before. Interest and dividends brought income to £1,356,043 (£1,333,462). Of the net profit of £408,278 preference and ordinary dividend (steady at 10 per cent.) takes £267,834 or 74 per cent. General reserve gets £81,087 (£104,975) and after outsiders’ interest of £lO4O (£1381) carryforward is £454,184 (£392,406). Earnings of the parent company (including interest and were £1,102,055 against £1,116,551 previously. Expenses were £740,221 (£737,007) after allowing for an over-provision of taxes of £20,000 last year. Net profit was £361,834 (£379,547). The parent received a dividend of £BO,OOO from Otago Motors, Ltd. The unchanged dividend payments of £267,512 and a transfer to general reserve of £150,000 (£50,000 before) left £230,204 (£255,822).

Chairman’s Review c The chairman (Mr C. U. Plimmer) in. his review says that as the year progressed prices, particularly for wool, continued to decline and the possibility of maintaining turnover figures receded. However, in spite of a decline of several £m in the sale of wool, the total New Zealand turnover—including that of the two subsidiaries, Otago Motors and Electric Refrigeration (N.Z.) — decreased by only £368,443. Total turnover in New Zealand was £45.6m in all the circumstances a creditable performance.

Appreciable increases were recorded in the merchandise, land, stock and trading activities. Mr Plimmer discussed the effects .of the lower wool prices and', the effect on the accounts of the parent company. He specially stressed the fact that farmers mostly spend their income in advance of receipts, for they received their income within a period of three to four months, but the expenses of producing it were incurred during the whole year. In consequence most farmers were requta’ed to borrow from the trading banks of the stock and station companies sufficient to meet costs until their incomes were available. • This situation was reflected in the accounts. Sundry debtors had increased during the year by £l.4m and overdrafts increased by £l.lm, a total retrogression with this group of assets of £2.5m. In other words there had been a conversion from one form of liquid assets to another form of asset. Those movements were offset by increases in trading stock, sundry debtors and shares and advances to subsidiary companies. . , The £500,000 convertible debenture issue would be a move toward strengthening liquidity. Assets of the group now totalled £ 14.3 m compared with last year’s total of £ 12.5 m. Group liabilities had increased from £6.Bm to £B.4m, an increase of £l.6m, or a net improvement in assets of £161,332.

Andrews and Beaven.—An unchanged annual dividend of 8 per cent, is payable on November 3, ex October 23.—(P.A.)

Broken Hill South.—Broken Hill South states that its fall in profit is due to a sharp decline in leadline prices. A working loss of £152,000 on production of the year from the mines at Broken Hill was Incurred, but realisations during that period of metals produced in the preceding year converted this loss into a net surplus of £215.000, before, providing for depreciation, administration, mining, royalty and income tax. —(P.A.)