CHANGE IN POLICY

Evening Post, Volume CX, Issue 100, 25 October 1930, Page 13

CHANGE IN POLICY

AVOIDING RISKS

WELLINGTON MEAT EXPORT ■;- ■ '•'■. COMPANY

,- The, annual meeting .of shareholders of :the Wellington Meat Export Coin-. ..pany, Limited, was held yesterday : afternoon. , . • The, chairman of "directors, Mr. Q, S. ■Ay.fttkins, "who presided,, in moviirg the adoption of tho report and balancesheet,' expressed-the regret of the direc'-;. tors at the unsatisfactory result of the • year's ' working. .At tho last annual meeting" he had held out hopes of ai 'larger output and improved trading tonAtions for-the season just closed., The : expectations of a larger output: had been fully justified,'the, excess of! killings .of sheep and.lambs over the; previous year being 74,20 i sheep and; 31,9.97,-Jamb's, making.a total of 100,198! carcasses..';. Tho'working costs had been considerably reduced .by this increased 'output. . ._ ' ' Regarding the trading operations, the chairman said that at the commencement, of.the season buying of -sheep and lambs was at prices which 'were considerably below, those for the previous season, and it looked as if a reasonable margin of profit was probable. Un- ' fortunately^ the market for tho company's products, in common Avith that for most "world-wide commodities, slumped badly, the biggest drop in .'"prices being in wool, pelts,, and fallow, ..with the result, that-what appeared to all concerned in the trade to be a safe .price. ..to-pay for stock at the commence-ment'-of the season proved to be'far in. excess of- the true value. . ■ Buying prices were ■ reduced from 'time to time, when it .became-'apparent • that ■. the 'markets were, falling,. but. .these reductions came too late to affect ..the. larger, portion of the company's purchases. ' ...".... "FREEZING- STOCK ONLY." ' When-it .became apparent that a loss; on. the year's working,was inevitable, ■ the directors without delay sought in every direction to find some channel: '■byHVhieh the risk of buying and selling anight be 'diverted from the company. In.the first instance an endeavour was -»iade to dispose of the company's,works . and • undertakings, as was attempted "■some years ago. Although the directors made every effort to bring about. a "satisfactory sale, these efforts were unavailing. --. •, ■ ..-'■' : .SStJeps .were then initiated with a 'vleV to•'arranging with exporters to .take ove.r the output of'the works, leaving the company to confine ■ its .operations to-;.freezing the stock- only. ..jjowever, -difficulties arose preventing this course being adopted. ''■ ■■■ Further negotiations had finally resulted in an arrangement whereby exporters would take the market risks for a period of years. 'An important part of the arrangement was that buyers had agreed to take over from shareholders who might; "wish to avail themselves

of' the offer their ordinary shares fit 10s per share'for the fully paid up. £1 shares.:- The date'by-which acceptances must Be lodged at tho company's offices was 31st October, .except for shareholders . .whoae registered address was beyond New Zealand, in which case the time was extended to 31st December. ;No reference was made in the circular'to preference shares, as these were not' included ;in tho offer to purchase. Moreover,-.the directors considered that under the,terms of the arrangement made there was every prospect of tho accumulated preference dividends being paid at a not far distant date, ' and regular preference dividends thereafter. ■■-~■ . ' Before .the .ordinary shareholders, could expect-to receive dividends there was a heavy liability "to the brink-'lu' be liquidated in addition to the preference dividends,'accumulated as well as-current,'and tins-might take some years to accomplish. The exact amount owing to the bank would not be aseertahia.ble till the company's, unsold stocks (which consisted mainly of mutton,, wool, and. pelts) had been disposed,of. . . It .was for shareholders to decide for themselves individually- whether they -would.'accept the 10s per share now or wait for the .distant prospect of receiving: dividends.■■■■ . -.•■■-..■ "tn recording; the death of Mr. Charles El-gar, who., hacl' been a-director.-of the company for many years, the- chairman expressed the" directors' deepest regret at his loss. . THE OUTLOOK. The Hou-.:'E. Newman, in seconding the adoption of the report and balancesheet, remarked that, it could not be a surprise, in.view of what had happened in . connection, with, the.markets, at Home, that/a.'position was arising in which it-was desirable for the company to be freed from the losses that had occurred of late years. He desired to emphasise that it had been arranged, that any farmers or others .who wished to freeze on their' owii account could c "] o S o—-there was no interference with that system, which 'was really the object for which the company was formed .many:years ago." ■ ■ . ■ One reason why in his opinion there: was a possibility .of the works becoming hiore valuable than they were now was that most people believed that before long the' Government would see fit to remove the obstacles which now existed in regard to tho development of tho export trade in pig and poultry products; In other countries, notably in Denmark, the pig and poultry, exports had' become more valuable than the dairy exports. He and others had been urging the Government very strongly for the last: twelve months to cancel all Customs duties upon: animal. foods which were required for'the fattening of pigs and poultry. It was certain that, with the falling prices for our dairy products 'and our meat, if was highly desirable that a new source of income 'should' be obtained. Anything that benefited the'farmcr would benefit them sis shareholders in a-meat freezing ■ organisation. Mr. -Newman mentioned that' their chairman had had a very arduous year ill connection with their company, and he thought the shareholders were . in-

debted to the chairman for t.Uo amount of work lie had put in. After answering, various..questions by shareholders/ tlie chairman put the motion, which was carried. The directors retiring by rotation, Messrs. W. D. Hunt and IL. Morrison, wore ro-elected, and the retiring auditors, Messrs. E. W. Hunt and \V. 8. AVliceler, were also re-elected. At the conclusion of the business, Mr. Marks expressed his appreciation as a shareholder of the' fact that (ho directors had clone their very best in ] the interests; of/ the company. I -——■ I