TRADE AND FINANCE

Evening Post, Volume CXXI, Issue 130, 3 June 1936, Page 12

TRADE AND FINANCE

PRODUCE & MARKET REPORTS FROM DAY TO DAY

THE CHAIN STORE

INVESTORS REGARD IT

IN BRITAIN .AND DOMINIONS

ploughed back in a businerj particularly suited to reinvestmciv. of earn- „ ings. Details of the major companies dividends are given as follows:— „ Austin Reed, 10 per cent.; Boots C.C., Southern, 6 per cent.; M. Burton, 6 per cent.; Home and Colonial, nil; International Tea, 30 per cent.; Marks and Spencer, 35 per cent.; F. W. Wool- 4 worth, Ltd., 100 per cent.; Hope Bros., .7 per cent.; Maypole Dairies, 4\ per i cent. i PRICE AND RETURN Latest sales reported ana mafle on * the Stock Exchanges of the Dominion. - with the highest prices and the ap- | proximate yields per cent, per annum ( to investors (all subject to appropriate . taxes and exchange where operative). , based on the last annual dividends, , plus bonuses, if any, and considering ■ redemption and brokerage in the case ; of redeemable securities where dated. , were as follows;— Highest tfielil. | price. p.c., p.a. £ s. d. £ «. d- | Wellinaton. Inscr. Stk., 4 p.c. - (1955) ....a. 10G 0 0 311 8 , Bank of N.Z ■ 2 3 3 4 b 4 Bank of N.Z. (D „ ' - i o Jlort.) 1 9 0 ? Union Bank s=. 915 0 ill 3 N.Z. Insurance 3 2 G 3 4 U ; Goldsbrough, JVloit. . 112 G 31310 j Wgtn. Jleat Export ; (pref.) 019 0 G 6 3 ' Wgtn. Meat Export 0 G 0 — Leyland-O'Brien — 1 2 i) 4 110 Dominion Breweries . 1 3 J < N.Z. Breweries - ™ , Tooiieys 1 J? ?' .. Broken Hill Pty. .. .1. 3/0 219 3 , Consolid. Uriel: 0 10 2 — ' G. J. Coles 4 1b » 1 4 , Hume Pipe (Aust.; .. 019 0 42 0. N.Z. Paper Mills 18 6 418 2 - Woolworths, N.Z. ... 9 0 0 111 1 ( Mount Morgan 014 8 010 4 , Skippers 003 Unofficial— . „ , .. 0 Woolworths, Ltd. d.7 310 0 110 2 | Shillings, Ltd. (7s Gd paid) ■ 010 1 Auckland. Govt. Bonds, 4 p.c. ■ (1949) a. 104 5 0 3 94; Govt. Bonds, 4 p.c. ; (1955) a. 10G 5 0 011 2 . Inscr. Stock, 4 p.c. ' (1955) a. 100 10 0 010 S ■ Auck. Harb., 4'/i p.c. „ . (9/7/53) a. 107 10 0 013 9 Waitomo Power, 4 1 , i : p.c. (1/8/45) a. 102 0 0 fib National Insurance . 018 0 4 <. 4 . South British Ins. ... 410 0 219 3 Goldsbrough, Molt. .. 112 0 313 10 Auckland Gas } i H tl? tT Devonport lerry 11 J 411 11 Dominion Breweries . \ 3 0 Iri N.Z. Breweries !•> ■ - Anthony Hordern .... «13 J 2 2 8 British Tobacco i. 21 f ' A - ?« * Broken Hill Pty. ...i i 218 2 Consol id. Brick 0 10 2 n Earners' Trading .... 010 0 N Z Drua 4 0 0 19 6 Woolworths, N.Z 9 0 0 111 1 Grand Junction 0 4 0 b bo King Solomon 0 2 4 n. Skippers 0 0 3 -- Mount Morgan 014 ' 611 Unofficial— . . ln 9 Woolworths, Ltd. d.T G 0 110 2 Woolworths ("W.A.) t.f 10 0 110 o Alluvial Holdings .. 0 1 b — Christchurch. Inscr. Stock, & p.c. one (1955) a. 100 0 0 311 8 Inscr. Stock, 3V4 P-c. (1038-52) a. 102 17 6 311 10 N.Z. Farmers' Co-op. 7ns 4% p.c. (1940) 91 0 0 7 0 8 u ?»« Comm. Bank Aust. .. CI 19 4 3! 0 4 Bank of N.S.W 11 0 3 1 5 Bank of N.Z 2 » 3 4 8 4 Union Bank s. 910 0 2 U 3 National Ins.. ....... 018 1 4 211 Goldsbrough, Mort .. 112 0 313 10 United Building { 1 or <■ Australian Glass .... 411 G 350 Hume Pipe (Aust.) . 1 0 0 4 0 0 N.Z. Breweries 213 11 210 7 Tooth and Co. 212 0 416 1 British Tobacco ....1. 2 3 Zlo * Dunlop-Perdriau .... 017 8 Broken Hill Pty ...i. 3 8 3 218 7 Broken Hill Pty. (new), 10s 2 5 6 n. (5. J. Coles 1 0 ? Howard Smith ...... 018 9 -13 4 Hume Pipe (Aust.) . 1 0 0 4 0 0 Morts Dock 0 0 J " Mount Morgan f ' 14 IS Gl/ 11 Skippers ••••.•. " 0 i? Waimumu Sluicing ... 0 0 7 Mount Lyell 1 4 i_. 2 0 / Mossy Creek 0 1 Okarito : 0 3 G n. Unofficial— , in r Woolworths, Ltd. d.t ols 0 110 o Duncdln. Westport - Stockton (pref.) 0 2 1 Bruce Woollen (pref.) 4 17 4 Broken Hill Pty. ..i. 3 7 0 219 8 G.J.Coles 4 0 0 3 2 6 Mount Lyell 1 4 b - 0 9 Argo Gold 0 1 0 Unofficial— Woolworths, Ltd. df 515 0 110 5 Lustre Hosiery 153 G29 f—Ex. rights. a.—Market price includes accrued interest, but not brokerage. d. —Capital doubled by issue of bonus shares, 1:1. i.—lnterim div. increased. n.—Position not. available. s. —Div. payable in sterling. 't. Capital trebled by issue of bonus shares, 2:3, i AUSTRALIAN GOLD OUTPUT. The Commonwealth Statistician (Dr. ! Roland Wilson) recently announced : that the production oi gold in Aus- ( tralia for April was 91,501 fine oz, valued at £795,179 in Australian curl rency, compared with 77,116 fine oz, ! valued at £686,499, Australian cur- ; rency, in April, 1935. The total proi duction for the four months ended t April, 1936, was 336,467 fine oz, valued j . at £2,925,904, Australian currency, comj pared with 230,696 fine oz, valued at ; £2,046,156, Australian currency, in the four months ended April, 1935. A RICH CRUSHING. J 'A parcel of 34J tons crushed at the South Kalgurli mill for the North Boulder Kalgoorlie. Ltd., mine on the Golden Mile, Western Australia, has - yielded a return of 3oz 14dwt 18gr per ton. For the last six months crushings of about 60 tons have been put through twice a month for an average return of approximately BJdwt per ton. ■

"Evening Post," June 3. 1 There is no doubt about the popuarity of the chain store or multiple shop concern with the average investor, llthough all such concerns are not necessarily prolific dividend-earners. Those operating in Australia and New Zealand in recent years, however, appear to be doing most satisfactorily by their shareholders, as the market prices of the shares of some of them suggest. For example, the shares of certain well-known store companies now well established in Australia and New Zealand show marked appreciations in their values during the past year. A comparison is made as follows: June 1, June 1, 1933. 193 G. £ s. (I. s. d. Woolworths (X.Z.), »rd. HOG S T fi Woolworths, ltd. _ (Sydney) * 4 » 6 jlO 0 Woolworths OV.A.) * •' - 1 ® ® li. 1. Coles, Ltd 3 8 0 318 0 •Buyers. In anticipation of capitalisation of ■ undistributed profits the price of Woolworths (N.Z.) ordinary £1 shares early in August rose to as high as. £14 ss. Subsequently a distribution by way of special dividend or bonus was made on August 15 of three new ordinary ; shares fully paid in the proportion of two shares held. After' this distribu- ; lion the approximate price of the £1 i ordinary shares at August 30, 1935, was > £5 17s 6d. The ordinary shares of ; Woolworths, Ltd., the parent company, with head offices in Sydney, are not listed on the Stock Exchange, but the first and second preference shares are so listed. A bonus issue of one ordinary share for one held in that company has been made arid the shares have sold up to £6, although they receded to £5 15s and they hold that price. The Western Australian subsidiary Woolworths (W.A.) has made a bonus issue of two ordinary shares for one held, and sellers are now asking £6 for these shares, buyers offering £5 2s 6d. G. J. Coles, Ltd., Melbourne, conducting a business somewhat similar to the Australian Woolworths, last year made a bonus distribution of one ordinary share for every ten held. The profit-making capacity of chain stores on experience of such companies operating in the United Kingdom forms the subject of a special article in "The Economist," London. A period of six years is taken. The journal shows how the multiple store principle may be applied, to either purely retail businesses or to retail outlets of a concern which is primarily interested in manufacturing. Mention is not made, however, of the big meat companies who buy and freeze meat and retail it through their own chains of shops; nor of the disposal through co-operative retail shops of the many and varied manufactures of the co-operative wholesale societies of England and Scotland. THE, MULTIPLE SHOP. "Dealing first with the retail organisations, "The Economist" refers to F. W. Woolworth, Ltd., International Tea Company's Stores, and Austin Reed, men's outfitters, as examples, since— though each of these concerns may manufacture part of the goods sold in its shops—manufacturing is not their main business. Of the second type, the Cash Chemists subsidiaries of Boots Pure Drug, or the retail shops of Montagu Burton, or those of J. Sears boot and shoe group, are examples. J. Lyons and Company fall intermediately between the two groups, since, though they manufacture the greater part of the goods sold in their shops, the essence of their business is in the retail refreshment trade, rather than in manufacturing. It should be added that Lyons s are heavy buyers of meat, butter, and cheese, flour, sugar, tea, and other articles of food for their business as restaurateurs. „ . Though the multiple shop business has grown very rapidly in the United Kingdom during this century, and even during the past decade, the rapidity of its expansion has not been due to any exceptional openings for profits in the business, but rather to the fact that, once the principles of efficient shop management have been mastered in one or two centres, expansion of the business is a relatively simple affair of multiplying units. The inducement to "plough back" earnings into the business is consequently much greater than in the case of manufacturing concerns which have to create new products, or new ppenings for existing products, before retained earnings can usefully be reinvested. This principle is best illustrated in the Boots Cash Chemists subsidiaries, remarks "The Economist," which for a number of years past have distributed only a very small portion of their earnings to . the parent company, applying the retained profits to the expansion of their chain, and borrowing to a mod- ] erate extent from the bank in anticipation of future retained profits. The qualities required for successful management of multiple store, business include a knowledge of real estate, a sound eye for shopping , centres and shop design, an efficient building and maintenance department, and a high degree of organisation/buying capacity r and sensitivity to public demand. The recent meagre profits of even so large and strongly backed a group as the Home and Colonial Stores and its associates, contrasted with a record of, say, International Tea Companys Stores, suggest that "management" is a highly important element in what is far from an easy trade. But once a concern has established the soundness of its management (of which the profits record is the best working index), its shares offer both the stability which is associated with retail distribution and the steady expansion which comes_ ! jroni__pronts