NEW ZEALAND TOBACCO

Evening Star, Issue 20040, 4 December 1928, Page 3

NEW ZEALAND TOBACCO

810 SPURT IH PRODUCTION WARNING AGAINST SPECULATIVE CROPS ISpbcui. to the ‘Star.’] AUCKLAND, December 3. A note of caution regarding speculative crops of tobacco in Now Zealand is sounded in the annual report of the directors of the National lobacco Company, whose _ headquarters are at Napier The report states:— “With regard to the production of raw leaf, sufficient quantities are already being grown to meet all the requirements of the local market. Nelson growers alone received last season an aggregate of £50,000 in cash from us. That figure represents a vast amount of leaf, portion of which will have to bo carried over into the new season As things arc now—farmers not secured by contract putting in crops on' ‘spec”—the danger of overproduction is imminent unless an outlet is found somewhere lor the surplus. The chances of export are of the poorest, in view ol over-production _ in other parts of the British Empire, especially llhodcsia, where millions oi pounds of superb leal >ro begging For want oi a market.”

The report shows net profits amounting to £38,057, after deducting all charges and allowing a sum of £11,300 for income tax The dividend proposed is one of 15 per cent. Xhe report of the chairman of directors (Mr G. Husheer) states that the volume of business exceeded that of the previous year by 80 per cent., but notes that shareholders should bear in mind that progress at the rate experienced in the past cannot continue indefinitely, because the company depends for the sale of its goods exclusively on the New Zealand market, and the time will arrive when there is no room for further expansion The capital of the company was increased last year by the issue of bonus shares and shares at premium. The total now issued is 112,161 ordinary

£1 shares and 12,180 preference £1 shares The sum of £17,755 received in premium on the shares has been placed to reserve. The directors recommend a dividend of 15 per cent, on ordinary shares and 8 per cent, on preference shares,' and the transfer to reservo of £22,245, so that the reserve account (with the £17,755 received in premiums) will then stand at £40,000, and to carry forward to next

year a balance ot £4,849.