Mason Bros puts profit in perspective

Press, Volume CXI, Issue 32660, 16 July 1971, Page 16

Mason Bros puts profit in perspective

The chairman of Mason Bros, Ltd (Mr J. G. Souness), said at the annual meeting that the Leader of the Opposition (Mr Kirk) used the company’s 44 per cent increase in net profit in a way which was a typical example of how figures quoted in isolation could be misleading.

‘‘Our company is one of a number cited by Mr Kirk in Parliament as having shown sizeable increases in net profit to support his criticism of the Remuneration Act,” Mr Souness said. “This is a typical example of how figures quoted in isolation and without background information can be misleading. "The net profit was certainly 44 per cent higher, but if we put the earnings and dividend figures in perspective we see that average earnings on shareholders’ funds, over the last five years, were 5.1 per cent, and shareholders’ average return on capital was 5.9 per cent.

i “This is not unreasonable i when investors in gilt-edged i company debentures, and t company mortgages have i averaged a ‘no risk’ rate of ’ 7 to 9 per cent,” Mr Souness said. s The earning rate in 1966 i was 10 per cent on share- ■ holders’ funds, and in that i year shareholders received a 9 per cent dividend. Since

■ then there had not been any I issues and dividend rate was 1 now 8 per cent. “How many wage earners ! would like to receive less to- ’ day than they received in , 1966?” said Mr Souness. • "Although shareholders are; i now seeing some improve-. ment, wage and salary;

earners have had a much bigger share of the cake than they had in 1966, but the shareholders’ share has diminished,” Mr Souness said.

Referring to disputes and strikes in Auckland’s heavy industry, Mr Souness said that they were affecting exports—particularly those with a high labour content. “The time has come when [the whole aspect of remuneration for services and worker participation in industry requires rethinking.

“There is more to it than just a share in the profits. Our well-educated work j force needs to become a more integrated participant in industry. Rigid demarcation between worker, management and shareholder is not the line upon which New Zealand will build its prosperity,” said Mr Souness. j “All parties need a meeting place away from pressure of day-to-day industrial problems. “Because large sections of industry have proved that they cannot agree, the Government should set up a body similar to the National Development Conference to examine, plan, and set targets for labour and management alike.” Mr Souness said. “It could have its committees report on such subjects as working conditions and amenities, costs and productivity, worker-management relationships, production and profit distribution, industrywide retirement plans, and many of the related conditions which go to make an enlightened and satisfied work force.

“In this way, radical elements could be defused and arbitration and conciliation in the true sense brought into labour relations,” Mr Souness said.