RECORD YEAR

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

RECORD YEAR

NET PROFIT £41,000

FINANCIAL ACHIEVEMENT

In seconding the adoption of the report and balance-sheet, the managing director (Mr. H. J. Kelliher) said: —

"The period under review has been in every respect a record year in achievement. We issued the balance of our nominal capital, bringing the total paid-up capital to £250,000, on terms of a substantial bonus to shareholders and,at a premium to the company. We employed this capital with results that show a net profit of over £41,000 for the year, and after providing for depreciation'and contingencies, allowing £35,000 for income tax, and paying 10 per cent, dividend to shareholders, we are still in a position to strengthen .our reserves by an additional £15,000, bringing the grand total under this heading up to £75,000.

"The directors are of the opinion that the reserves now held place the company in an unassailable position, and are more than sufficient to take care of the immediate future. With regard to depreciation, the directors have pursued a very conservative policy, and each year have made provision for depreciation actually 33 1-3 per cent, above the maximum prescribed by-the income tax authorities. INCREASED OUTPUT. "The increased output noted for the year ended March 31 still continues in every department* taxing the output of the brewery to the utmost. For the past three months, since the close of the financial year, our turnover has increased by over 40 per cent., a fact I which in itself is striking evidence of i the popularity of the company's brands. "I have no hesitation: in saying that this popularity is well merited and is a tribute to the outstanding quality of Waitemata products. From the incep-1 tibn of the company, it has been our | main objective to produce the best beer, it is possible to brew in New Zealand, and we may now claim that we have achieved this objecitve. Waitemata i and Dominion Bitter are in a class on I their own, and represent an entirely new standard of the brewer's art. This is brought home to us every day by the growing number of consumers who have been converted to our products and who insist on having our beer in preference to other brands. That this is not an exaggerated statement is shown by the fact that during the past year the sales of Waitemata and Dominion Bitter increased by over 62 per cent. HIGH STANDARD OF QUALITY. "The reason for this popularity is the Waitemata process of brewing, a process carried out under ideal conditions and with the help of the most hygienic and up-to-date plant, machinery, and equipment. In addition, our products contain nothing but the best possible j quality of ingredients and the highest percentages of malt, hops, and cane sugar. You will be surprised to learn that over 3,200,0001b of malt, hops, and cane sugar went into the brewing of Waitemata and Dominion Bitter during

the year ended June, 1938. The New Zealand malt alone used during the period involved an expenditure of over £35,000. Preservatives of any kind are never allowed to enter the manufacture of our products. SCIENTIFIC BEER SYSTEM. "Perhaps shareholders will remember that at the last annual meeting, I stated that the company had devised and patented a temperature-controlled beer sysem, by means of which our draught beer could be kept and served under the most hygienic conditions. With an intimate knowledge of the trade, we realised that it was not sufficient to build the most • up-to-date brewery—with plant and machinery the most modern procurable in any part of the world—and to spend large sums in procuring the highest quality product, without an effective system, by means of which our beer could be served to consumers in the. same hygienic condition and uniform standard of quality as it leaves the brewery. "I am glad to say that this system has proved a remarkable success, and is recognised as such throughout the trade. It is, without doubt, the most scientific and most satisfactory system ever devised for servicing draught beer, and wherever installed the turnover has shown substantial increases. This system sets an entirely new hygienic standard and ensures the fullest benefits from our exclusive brewing process. In due course it will be installed in all our hotels. FUTURE PROSPECTS. "I would just like to touch briefly upon future prospects as far as our own company is concerned. The results of the past twelve months, combined with the present outlook and continued progress, justify the most optimistic view regarding the future. The company has in every way consolidated its position, and its entire policy is based on the sound foundation of quality combined with an assured output for many years ahead. "Indeed, there is every indication that the company could profitably employ additional capital for further expansion, and your directors have given careful consideration to such a policy. The net profit earned during the year under review represents 17 per cent, on the subscribed capital, and, even without allowing for an increased turnover, the company could have comfortably paid a 10 per cent, dividend on an additional £100,000 capital and still place an adequate sum to reserve. BONUS FOR EMPLOYEES. "I wish to pay a very warm tribute to the splendid work and co-operation of our very efficient and loyal staff, to which much of the success achieved by the company during the year under review is due. Individual effort plays a very important part in the successful working of a brewery* and a staff of keen and contented employees constitutes an important asset to any industry where efficient labour is such a| vital factor. I "It gives me much pleasure, therefore, to announce that, in order to show > our appreciation in a practical and tangible way, the directors have decided to pay a bonus of 7£ per cent, toj all employees of the brewery, town store, and head office, calculated on j ordinary wages earned during the twelve months ended March^ 31, 1938. Further to this, all brewery and store wages will be forthwith increased by 7£ per cent. A SUCCESSFUL ENTERPRISE. "We have every reason to feel proud of an organisation which today plays an important part in the economic and industrial life of this country. In the first place, the Government participates to a remarkable degree in the company's successful activities, as the major share of the proceeds of the year's trading goes to the National Exchequer. Excise and Customs duties and sales tax paid during ifte year amounted to £128,000, while land and income tax require a further £34,500, making a total of £162,500 by way of direct and indirect taxation. "Industry has benefited considerably by the large quantities of New Zealand barley and hops absorbed by the company, a fact which is probably more fully appreciated when it is.realised that over 40,000 sacks of malted barley were purchased during the financial year. ~ "By way of improving our general hotel service, over £'25,000 was spent in renovating and reconstructing hotels, modernising bars, etc., and providing improved and up-to-date facilities for travellers and consumers generally. In this way we are providing an improved service for the public on a scale probably never before attempted in this country. "Notwithstanding these heavy items of expenditure, the company is in a position to pay its shareholders what must be considered a very fair and satisfactory remuneration for capital invested, more especially in view of the general consolidation of the company's whole position. "To make the cycle of a successful enterprise complete and so that labour as well as capital may participate in a fair measure, the directors recommend, as already explained, a 7* per cent, bonus, as well as a further increase in wages, which already are above award rates. The directors' action in this connection, and particularly in. restor-l ing wage cuts in times of great difficulty, has been greatly appreciated by members of bur staff, as well as by, workers in other industries, and will, j I feel sure, meet with the wholehearted approval of the shareholders."— E.K.B.A. ■'