A GOOD YEAR

Evening Post, Volume CXI, Issue 108, 7 May 1926, Page 9

A GOOD YEAR

CITY MILK SUPPLY

APPLICATION OF PROFITS

EEPOET TO CITY COUNCIL.

Eeports . laid before the City Council last night showed that the Milk Department has enjoyed a year of sound business, and that, among other appropriations, sums had been set aside in reduction of over capitalisation, to keep down the level of the winter price of milk, and to build up the fund for the establishment of a new milk station. "In presenting the report of the work of the Milk Department for the year recently ended," said the chairman of the committee (Councillor W. H. Bennett), "I have to say that the department's buildings and plant have been kept in good order and condition, and that in this connection all buildings, both at Wellington and Eahui, have been painted during the year, and the _brino chilling facilities at Eahui considerably enlarged. WINTER MILK COSTS COUNCIL MORE. I "The anticipated loss on last winter's operations, for which provision was made out of last year's profit, was less than provided for, but it is anticipated that the loss on the present winter's trading by fixing the retail selling price of milk at 7id per quart will be considerably greater than last year owing to the higher price being paid to the producers over that paid last year, amounting to approximately l^d per gallon. This is brought about by the high market value of butter-fat which has ruled during the summer period on which the winter premium of 85 per cent, has to be paid, and my committee have made due provision for this extra cost. "My committee has, during the year, month by month, set apart a sum to make up £2000 towards the reduction of the balance of our over-capitalisation, and recommends that a further sum of £2000 be now applied for this purpose, making £4000 in all for the year. "It also recommends that a sum of £3000 be added to the New Station Eeserve account. There will then remain the sum of £8677 16s Id to carry forward to meet the anticipated loss on the current winter's trading. "In conclusion, the committee thinks that the council is to be congratulated on the continued success oE its Milk Department." GENERAL MANAGER'S REPORT. In the course of his report to the Milk Committee, the general manager (Mr. B. E. Hcrron) stated: — "The trading account discloses a profit of £7254 9s 5d for the year which, added to the balance (viz., £10,970 6s Id) of the appropriation account as at 31st March, 1925, makes a gross total of £18,224 15a Gd. . . The appropriations made, continued Mr. Herron, and the various transfers, (reduction of over-capitalisation, new station, etc.), would reduce the appropriation account to £8677 16s Id, and as it was estimated that the sum of £8400 would be required to offset the losses anticipated to be made during the winter months, the department should start off the next summer months with a small credit balance. Ecferring to the balance-sheet, Mr. Herron stated that on the assets side freehold property had increased by £2492 3s lOd, the cost to date of acquiring the land for the new station. "As indicated previously, I desire to have wiped off at the earliest possible date the amount (£12,003) of overcapitalisation ascertained two years or so ago, so long as the present reasonable selling prices of milk can be maintained. Nearly half (£G000) of the amount required will have been provided for out of the last two years' trading if the recommendation now made is adopted. NEARER THE NEW STATION. "In addition, if my recommendation is acted upon the sum of £5000 will have been provided for the new station reserve account, thereby bringing us appreciably nearer to the realisation of our ambition to have an up-to-date milk-treating and distributing station with all the advantages which will accrue to the department. "It is pleasing for me to report that the bad debts for the year amounted only to £44 IGs 7d, which is approximately only one-fiftieth part of 1 per cent.- of the department's turnover, and it is to be remembered that there is some risk of loss in connection with our token consignment agencies. "I consider that we have every reason to be satisfied with the year's results, especially as we have paid 1.75 d per lb of butter-fat during the last summer season more than was paid during the preceding summer season, and the selling price of milk was not raised." DEPARTMENT CONGPvATULATED. Councillor H. D. Bennett congratulated the department on the success of its operations during the year, and particularly upon the prudent provision made to write down the capital in so substantial a way. In another season or two the department would be in a position to face any position that might i arise. The Mayor also expressed his satisfaction at the year's working and at thf provision made to meet depreciation and write down over-capitalisation, while at the same time operating at a reasonable level of prices. There was no doubt that the public would reap the benefit when the new station was opened upon a financial basis if the same prudent policy ;ivere pursued in the future. The report and balance-sheet were adopted unanimously.