AUSTRALIAN-NEW ZEALAND

Evening Post, Volume CXIX, Issue 104, 4 May 1935, Page 12

AUSTRALIAN-NEW ZEALAND

INFORMATIVE ANALYSIS

"Evening Post," May 4.

Earnings of ; 167 companies, of which . , 134- are Australian and 33 New Zealand, . for.the year 1934 and to April 1 last are . analytically dealt with in "Jobson's Digest." ■ , ' The. 1934; net earnings in the aggregate represent an improvement of 19 6 per :, cent... over the 1933 figures. The corresponding' percentage' shown in' January ■ was a 24.7 increase, and 19.1 per cent, in tlje October, 1934, compilation. . ■O§ the^l67 concerns reviewed 121 (72.46 per cent.) did better in 1934 than in 1933 Of. these 94 (70.14 per cent.) were Aus- ' trahan. and 27 (81.82 per cent.) New Zea- ■ land companies. .',"■■■ Taking the groups as a whole, the net profit f0r1934 was £766,890 greater on the year at £4,616,358, which -figure was '- £262,676 .below the .1930 level. The 1934 .net profit represented £6 8s Gd per cent. on capital, as against £6 12s 9%d per ' cent, in 1930. These companies paid out ' £4,372,361 "(-£5 19s per cent.) in dividends 'in; 1930, and £3,248.267 (£4 10s 5%d per ~ cent.) last year. During the five years //.capital was .reduced .; £1,645,669 to £71,846,662, V but reserves' were increased ■•■. £1,271i971 to. £27,464.378. : Conoequently,. shareholders' funds were down £373.698 it £99.311.040. Due to the reduced capi--1 tal the net assets .value of-the shares moved" up from 27s l%d per £1 invested in'l93o to 27s 7%d per £1 invested in. ■ 1934. -..-■■; ■~ ■ ; CAPITAL }AND RESERVES. i The Australian - capital' was lowered by : £1,328,417. to £65,933.101, while reserves rose £950.056, to £25,541,543. making ' shareholders' funds : £378,361 down >at ' £9i;474.644. ' The per '£1 backing of shareholders' funds moved from 27s 33d to- 27s 9d in 1934. The Australian con; cerris earned £6 15s lid per cent, in 1930, and £6 3s ll&d per cent, in 1934, while ■ the respective dividends were £5 18s 3%d ; per cent..and £4 8s 2%d per cent. ■•'■ The New Zealand. concerns suffered a .reduction in capital of £317.252 to £5.913.561, but reserves rose £321,915, to ' £1.922,835, making shareholders' funds : £4663 greater on the four years at ■; £7,836,396. The net-assets value per £1 : invested moved from 25s l%d in 1930. to , 265-6dL'lastyear;. In 1930, £4 19s o%d per • cent, -was earned,while the dividend was ; . much- greater/at £6 6s 6%d"per cent. Last year £8 19S o%d per cent, was earned'Rnd ' £5 14s lOSid distributed. •' : ' ■ Losses over the five years were: .1930, , 31 (25 Australian and 6 New Zeal^d); 1931. 48 (6 and' 42) ;; 1932, 48 (9 and J9); 1933,r33-(6 and 27); and 1934, 191 (3 .and -iay /■ it * ■■- ■ ■ ' ■ ■■ ■'. ' - It is encouraging ,' to find that two banks,,the Bank of New South Wales and : tHjs'E^Jand A: Bank.haveboth'iinprpved on "their' 1933 results. The recovery lias been small, but. it is, indeed, a hopeful and. encouraging sign when banking institutiqns, especially sucli as these, at least, ■ show an upward trend in their '.!arnings.j RECOVERY IN NEW ZEALAND. '. It is also gratifying to find thfet the New Zealand companies have made such '■'•■ a good recovery. For. some time their improvenJenb waa ra lone way behind the ■ measure of recovery in Australia. • It must be remembered ■, that the re- '■■■, coyeries staged in 1934 followed the 1933-34 . wool-sellinK season, when prices advanced ; to,a remarkable extent. rTlie sales of the • 1933-34 season have been carried "out with ■ prices round about the 1932-33 level..There- „ fore,-it-is to be borne.in mind that the . improvement in earnings in 1934 may hot ' be repeated, anyway, at the same rate . during 1935..; : *'"';. : ■ ' ' /'We agree wholsheartedly with the National Bank (of Australasia) in its "warnings regarding conditions." states ; the "Digest,": and it observes that "many maintain that the depression has; cone and- that we are irrevocably on the way to'recovery. The fact that the improvement in the January table is_ not borne out by the present compilation ; stiould ; temper-siiper;optimism.' . ' "Unemployment has been substantially alleviated by absorption by private enter; 'prise,- and also- by governmental unemployment relief expenditure. " Confidence r.has s been .:impr6ved by sound government. Take-any one , away, and the lot" falls \ like; a pack of cards.'. , - ; / '-."Wool prices have dropped this year, ' btit it has found its true level after a suddenvrise.' ' - , -''■■■ "Governmental: Tmemployment expenditure" cannot go on for ever. It has largely •been financed by fixed and floating loans on which interest must be paid, and paid .v'by ..the taxpayer, and any increase in , taxation, will be fatal. ... '"When international political relations and financial affairs become ,■ stable, and when commodity prices jeach a profitable level.itwillbe.possibljr given soulid and stable government, to say that there is a marked recovery in Australian conditions. '.. Th^r'e has been, a noticeable imprbvement. ' but are still a lone way- behind. ', the '1929 level, ■ and much has yet to be ■ dbne.r The 'earnings iin 1935 will, most , probably, be above those of: 1934.- but the • improvement will, we think,, be less than ■that shown last year." '' '"•■..