"FLOOD OF IMPORTS"

Evening Post, Volume CXII, Issue 49, 26 August 1926, Page 10

"FLOOD OF IMPORTS"

KAIAPOI WOOLLEN COMPANY

RESULT OF YEAR'S WORKING.

"The year's trading operations have been unfavourable to the New Zealand woollen manufacturing industry. Tho flood of oversea imports lias continued unabated, and the unsatisfactory national financial position created by the huge excess of imports over exports has adversely affected business." In this sentence, tho anual report of the Kaiapoi Woollen Manufacturing Company sums up the general situation. The company's profit and loss account shows a credit balance of £4274 Bs. Last year there was a debit balance of £90,874 0s lOd. [It will be remembered that last year this £90,874 0s lOd loss was met by taking tho balance of the general reserve (£23,287 0a lid), and by writing down, the shares from £1 to 17s, the 3a (on 450,000 shares) equalling £67,500.] Tho directors recommend that tho credit balance of £4274 8s bo allocated to pay a dividend of 6 per cent, on the cumulative preference shares (the same dividend was paid last year, out of tho abovementioned general reserve), and that the balance, £369 19s Id, be carried forward.

The balance-sheet lumps the receipts together in the item ''by warehouse and manufacturing accounts, £70,773 15s 5d," and this, with £17 12s, for transfer fees, makes a total o£ £.70,791 7s lid on the credited side of the profit and loss account. On the other side is shown "advertising, repairs, general, and travelling expenses," £28,614 5s lid, and "rates and taxes, salaries, interest, and discount," £36,902 14s; which two items leave a credit balance of £4274 Bs, after allowing £1000 for depreciation on plant. Concerning depreciation, the directors remark in the report: "After full consideration of the low book values at which our property, buildings, and plant are held, and the fact that they are thoroughly maintained and of revenue, the usual depreciation has not been considered necessary, but adequate provision has been made for all wasting assets."

Plant additions foreshadowed last year have now materialised. At the last anual meeting the chairman of directors, Mr. J. H. Blackwell, said that tho establishment of a worsted plant was "very necessary in the days of changing fashions. In the past two or three years there has never been such a swing in the trend of fashion." Tho directors now report: "A complete worsted manufacturing plant has just been installed at our'Kaiapoi mills. This has been a long-felt need and will materially improve our manufacturing capacity. Some new machines have also been added at Eadley to meet the trend of hosiery requirements." On the property and assets side of the bal-ance-sheet "additions to plant" appear as £1.7,312 Os 3d; and, after deducting the £1000 depreciation, property and plant stand at £177,658 14s 9d. " "Stock manufactured, wool, and materials" stand at £295,089 13s 6d. The comment in the report is: "Special attention has been given to the taking of the warehouse stocks, and ample discounting made where necessary, and the stocks stand in our books at conservative values. It might be noted that we hold a somewhat larger stock of wool than last year." «

At the last annual meeting it was suggested by a shareholder that the soven directors shbuld be reduced to five. The directors' report now states: "Early in the year Messrs. W. H. Clark and B. E. M'Doagall resigned their seats on the board of directors. As the question of reducing the number of directors was suggested at last annual meeting, your directors decided not to fill tho vacancies in the meantime. Mr. W. H. Clark has given notice that he will move at the annual meeting of shareholders, 'That the number of directors be five instead of Beven.' It is proposed to take the decision of the shareholders on this point prior to the election of directors. The retiring flirectors are Messrs. A. M'Eellar and J. H. Blickwell, who, being eligible, sub' mit themselves for ro-election."