EXPANSION

Evening Post, Volume CXXVI, Issue 9, 11 July 1938, Page 15

EXPANSION

"BREWERIES* YEAR

DOMINION COMPANY

FURTHER PROGRESS

EXPECTED

Successful operations and a policy of Expansion, were reviewed by Mr. L. J. Stevens, chairman of directors of Dominion Breweries, L^d., at the animal meeting of shareholders, held in the Chamber of Commerce rooms at Auckland last Thursday*

"On the occasion of this, the eighth tanual general'meeting of shareholders; I have.to report that the past year marked a period of great expansion Snd consolidation in the business of the company," said Mr. Stevens. "This expansion was such, I may say, that during the year, your managing director was compelled to recast the whole ©f Kis budget programme in order to secure an output approximating the demand experienced for the company's products.

• "Coincident with this demand, opportunity was taken to consolidate and secure the company's position, so that your directors can now look forward, not only to a continuance of the results achieved during the past year, but also to a substantial improvement and father increase in business.

Shareholders are aware that the company now ranks as. one of the major industrial and manufacturing enterprises of the Dominion. In this respect its name, 'Dominion Breweries, Limited/ connotes its status; in name and fact it is a Dominion organisation. JTrom modest beginnings it has developed year by year in accordance with the progressive policy laid down by your directors. With its chain of hotels throughout the more populous parts of New Zealand, the company not only serves the public with the best accommodation and refreshment procurable/ but also promotes and maintains its large trade as brewers and wine and.spirit merchants.

\"Today in the North Island of our s>ominion there is a Dominion Breweries* house in practically every j Centre of note. Hadiatirig from Auckj&jtid,". the company's chain of hotels serves tfte public with modern facilities which mark a new standard of comfort and service. Whether it be in Auckland, Wellington, Napier, Wanganui, New Plymouth, Hamilton, or any of the smaller centres, the company's products are procurable in the company's own hotels, or at hotels serviced by. the company. * "I can claim that in promoting this .chain of hotels the company's policy is.tip to the minute; it is economical and effective. Without these facilities for trade, the company would not and could not have secured the'results wjych I shall refer to later.

EXCEEDING SUPPLY. view of the fact that we are practically, rebuilding the brewery, .Iwaichi when completed, will treble our present capacity, we were compelled to restrict to some extent our selling policy^ and had to decline requests from a large number of hotelkeepers from various parts of the Dominion, .who.are anxious to obtain and sell Waitemata, draught beer.

.■•fHojweVer, the new brewery is neariuig completion, and in a few months' time the company will be in a position to increase the present output by at 3£ast gallons per annum. We will then be in an unrivalled position, •riot pi3y to'niaintain the higft'^aality of. £ur products, but also to meet the Teady market that is waiting for an increased output. "Needless to say," added Mr. Stevens, ''*%fa tremendous increase in the demand for Waitemata products demanded the fullest co-operation of the Company's staff, and I shall leave it; $o tSe managing director to deal with fthe made, by the directors in appreciation of the services by the staff of the brewery, #toi^ and offices.. I need only remind 'i&areholders of the fact that the comjpany, over three years ago, led the way with restoration of wages cuts, and Recently again the company was "pleased to be able to advance the wages.scale at the brewery in respect oi its lower-paid employees. ;'-7-"To this general policy, and to the energy arid administrative ability of •fihte. managing director, Mr. Kelliher, coupled with improved economic conditions, I attribute the successful position of the company. What is more, we. have every reason to anticipate further success in the future. ': A YEAR OF EXPANSION, "'sfftit shareholders will turn to the Statement of accounts now before you, ■^dv will note the evidence of the ex'parision and consolidation I have already Referred to. The company is ln*bw the owner of "very comprehensive assets in the form of brewery ikiildings/plant, and equipment, and W freehold and leasehold hotels, furnishings, -etc.: The accounts for the year balance at a total of £480,767, compared with the previous year's t&al of £292,636. Of the total sum .shown on the liabilities side, sharesholders* funds, that is, capital, reserve fund, and appropriation account, account for £339,310. The proportion <$£ shareholders' funds to total of liabilities shows the strong position of the company. The assets side of the !?alance-sheet shows in the increased cost of land and buildings the result of the company's policy in brewery extensions and the purchase of freeJipld hotels.: I may say that in the year .under review the new brewhouse £{nldlng at Otahuhu was completed, arid today is a landmark in the district. The whole of the new brewing plain, however, has not yet been installed, owing to delays in delivery of 'oyerseas shipments. "Even1 with the completion of the \ new. brewhouse building and the installation of the plant, the company will still be faced with a further pro-; gramme at the brewery. The increase in trade has been such that the company's programme, arranged a matter of two years ago, now requires alteration so as to; provide further space for storage and conditioning, while the bottling and pasteurising plant is to be duplicated to meet the demands of a growing trade. "The new brewery plant, with furniture and chattels for hotels, accounts fox. the increase in the value of 'plant, machinery, furniture, and fittings.' The increase an value of 'stocks' and 'sundry debtors' is the logical outcome wf largely increased trade. i f PROFIT AND LOSS. "The 'profit and loss account' shows the gross profit earned to be £ 148,192. This sum is arrived at after payment of all excise duties on beer produced, and payment of Customs duties on imported wines and spirits, and after payment of all direct charges incurred in respect of brewery wages, brewing materials, and general purchases. This figure compares favourably with the Similar gross profit of £97,658 earned in the previous year. I may say that the large expenditure on the new brewB'buse and equipment did hot account for any of the profit in the year under review. It will be in commission very soon, however, and substantial savings iv all costs are then anticipated. 'General overhead, wages, salaries, interest, etc.,' show an increase of £8179, from £29,671 to £37,850. This sum includes provision for a bonus payment to brewery, staff, slor£ staff, and office

staff, and my Associate, Mr. Kelliher, will give you particulars of the directors' proposals in this respect. All I shall say at this juncture is that the directors are delighted to be able to recognise the services rendered by the staff. . ,

"Provision for land and income tax involves a reserve of over £34,500, or over £10,500 more than that required in the previous year.

"Freight and cartage, advertising travelling expenses and commission, and brewery expenses and depreciation items involve a sum of £33,728.

"The net profit available for appropriation is the large sum of £41,257. Shareholders have already been paid an interim dividend of. 10 per cent, per annum for the half year ending j September 30 last, involving a sum of £10,229. Your directors have now applied out of the profits a sum of ] £15,000 as an addition to the reserve fund, bringing that fund up to approximately £74,000, or, say, 30 per cent, of the capital of the company. Out of the balance then available your directors now recommend the payment of a final dividend of 10 per cent, per annum for the half year ending March 31 last. After these appropriations, the company will then have available to carry forward to the new year's accounts the sum of £4767, or an increase for the year in the j amount carried forward of £3800. INCREASE OF CAPITAL. | "Your, directors are taking the opportunity of the presence of shareholders i to hold immediately following this meeting an extraordinary general meeting to consider proposals for the increase of the nominal capital of the company from £250,000 to £500,000. The object of this latter meeting will be to enable the directors to offer to shareholders, as hitherto, any new share capital that may be required for the further development and expansion of the company's business. Your directors appreciate the confidence of shareholders* as shown by their support of the company in respect of any issues of share capital. It is necessary for your directors to consider appropriate capital provisions in relation to the growth and expansion of the company's business. The report and balance-sheet were adopted. . ' TRIBUTE TO MANAGEMENT. The retiring directors, Messrs. W. B. Brittain and J. Fraser Smith, were reelected. In acknowledging the renewed confidence of shareholders, Mr. Brittain paid a tribute- to the work of Mr. Kelliher in the interests of the company. Mr. Kelliher, he said, was not content to lag behind or follow others, but he blazed a trail of his own. The result of his work was shown in the modern amenities which the company provided for the public and its progress and consolidation during the past six years. The company had achieved a record that was not approached by any other company" in New Zealand. The honorarium of the chairman was increased from £250 to £500 per annum and that of the four other directors from £150 to £250 each per annum. The auditors, Messrs. Hutchison, Elliffe, and Cameron, were re-elected and the fee increased from £150 to £210 per annum. NOMINAL CAPITAL INCREASED. The extraordinary meeting of shareholders, following the annual meeting, adopted the proposal to increase the nominal capital of the company to £500,000, by the creation of 250,000 ordinary shares of £1 each. The chairman said, as he had previously indicated, no decision had been made as regards the issue of any new capital, but it was necessary that the directors should haye proper and reasonable capital arrangements in accord-1 ance with the" requirements' of the company. . | Mr. Kelliher said new capital would be issued only if it could be profitably! employed by the company. In reply to a question, the chairman! said any new capital issued would definitely be offered to shareholders in the first instance.- The question of premium and terms had not been discussed by the directors and nothing would be decided in this respect until the need arose. Dividend warrants will be posted to shareholders tomorrow.