P. AND O.'S YEAR

Evening Post, Volume CXXII, Issue 149, 21 December 1936, Page 16

P. AND O.'S YEAR

A STRONG POSITION

ORDERS FOR NEW SHIPS

(From "The Post's" Representative.)

LONDON, December 2,

. The outstanding feature of the bal-ance-sheet of the Peninsular and Oriental Steam Navigation Company is a new item called a special reserve. This amounts to £6,481,434, and arises from the realisation of assets in the winding up of a subsidiary company and from a distribution out of the reserves of another company. This new reserve is regarded' as an excellent instance of the manner in which the board of directors have overhauled and strengthened their financial position following the depression. Together with the , announcement of a resumption of dividends after a lapse of a year or two, this improvement will no doubt be welcomed at the annual meeting.

A survey of the balance-sheet shows that all but £ 300,000—which is transferred to the ordinary reserve, bringing it up to £4,000,000—is applied in writing down- assets—investments in subsidiary companies by £250,000 and the value of the fleet by £5,931,434. Thus the book Value of the fleet in service is reduced from £12,602,872 to £5,695,109. The cost of the fleet was £22 626,294 and the amount written off is now £16,931,185, whereas depreciation to date at 5 per cent, per annum would have amounted to only £12,612,833. . SUBSIDIARY INTERESTS. Another new item is payments on account of new steamers, amounting to £1.731,133, the company having placed orders for two more vessels of the "Strath" class, while two cargo vessels are also under construction. Investments in subsidiary shipping companies and in coaling, wharfage, and other undertakings show little change at £11,359,053, but the total-of the fixed assets is now £19.618,215, against £24,816,124 a year ago. , Last year the directors set aside £1,313,944 for depreciation (on a 5 per cent, basis). This year the amount charged to revenue is only £880,000. Floating assets have increased from £9,621,412 to £10,227,108, the bulk of I these assets being represented by highclass trustee investments which show 'an appreciation over book values. On the other hand current liabilities show a big drop from £ 15,055,574 to £10,052,451. INCREASED REVENUE. This is the outcome of the transactions that have resulted in the creation j of the special reserve. Deposits under the profit-sharing scheme, which figured in last year's balance-sheet at £1,042.133, have been reduced to £983,838; this will be repaid on January 1, but certain depositors have been given the option to redeposit under a new scheme. As a result.of thevarious | changes the total of the balance-sheet is brought down from £34,437,536 to £29,845,323. The consolidated balance-1 sheet shows a strong liquid position, floating assets (£21,692,503) being more than double the amount of current liabilities. The revenue account shows a notable improvement; the net balance I is £328,910, against £156,999 a year ago, a figure that was only reached after taking £450.000 from the reserve.