SPLENDID RECOVERY

Evening Star, Issue 20310, 19 October 1929, Page 4

SPLENDID RECOVERY

SOUTH OTAGO FREEZING WORKS LAMB PRICE FALL COSTS £4,700 It was disclosed at the annual meeting of the South Otago Freezing Company, Ltd., held at Balclutha yesterday, that the works had put through 137.000 head this season, as against 91.000 last season, and that a profit of £2,164 was shown. Mr James Smith (chairman of directors) presided oyer an attendance of 200 Shareholders. ■; In moving the adoption _ of the report, Mr Smith said; “ I think we must congratulate ourselves on the wonder-, ful recovery we have made since the projected sale of the. works. At the annual meeting for several-years past we have almost gone on our knees to you imploring you to support the works to the tune of at least 150,000 head per season, and warning you that if you did not do so the works would have to be sold. I suppose you thought it was the old -fable of crying ‘ Wolf Wolf ’ when there was. no.'wolf there; but when the wolf actually came , and the works were to- be sold you- saw the danger, and,sprang off your tails immediately. I say unhesitatingly that the proposed sale of the works was the best thing that ever happened to the company, and Mr James- Begg deserves a gold medal for the part he played in it. Up till that date (March 2<), although we had opened three weeks earlier, we had only put through 39,000 head; but after that the stock simply poured in, so that at the end of the season wo had put through 157,000 head, or 67,000 more than the previous season, and 1 now ask: Why could this not have been done in previous seasons? If you examine the profit and loss account you will see what a largely increased output means. Our overhead expenses were practically the same for putting through 157,000 this season as they were for putting through 91,000 last season, while our charges came to £7,000 more than last season. Unfortunately, towards the end- of the season the price of lamb in- London came down considerably, but still the. schedule price here kept high, so that when the C.W.S. got their 75,000 (the quantity they agreed to take) we had to take all that came forward ot schedule rates, resulting in an estimated loss of £4,700. We also suffered an estimated loss of £2,200 in advances on consignments without recourse. _ Personally, 1 have always thought this a very risky business, and in the future we will have to alter our tactics. You will notice that, in spite of our losses, we show a profit for the year of £2,164 16s lid, which the balance brought forward from last year of £350 13s lid- gives us a credit balance of £2,513 10s 10d.: This we propose to carry forward to help to pay for the verv substantial renovations which have to _be carried out to enable us to deal with the increased number of stock we will have to deal with in the forthcoming season. We hope to have these completed before the season opens, when we will ho able to deal with 3,000 head per day. Wo have made arrangements whereby wo can take all stock offering —no limit as to number—at a farthing less than the Canterbury schedule, and from present appearances we will put through at least 200,000 head. ■ I am very glad indeed that the proposed sale

has at last wakened you up, and T sincerely hope that you will avoid taking any sleeping draughts in the future. Stick loyally to your own concern. You have thie. ball at your feet now; you have only to keep it rolling, and you will have one of the soundest businesses in the dominion. (Applause.) INEQUITABLE TERMS.

Mr Leary, in seconding the motion, said it had been most encouraging to the directors to see the support , accorded the works by the farmers, and he felt sure, in view of the satisfactory arrangements made for the disposal of next year’s output, if the support was continued, the coming season., would prove a record one. The directors estimated they would put through at least 200,000 carcasses. If it had not been for the losses mentioned the company Would have shown a profit of approximately £9,000. It was to be regretted that these losses were made. The reason was that the company had been offering terms for freezing stock that were not on true business lines. He referred more particularly to the con signments of stock. The balance-sheet showed that, on account of the terms allowed, there was a loss of £2,200. There was also the question of hanging up. Suppliers ■ had the privilege, now of hanging up at the beginning of the season, and allowing stocks to remain until the end of the season without cost, and the result this year was that much of the stuff had to be taken oyer by the company at'a loss. Ho maintained that the terms were not equitable. It amounted to this: Those people who sold on the hoof or on the hooks had to , find their share of the loss, whereas any loss that occurred in that connection ought to be borne by those who consigned. (Applause.) For himself, he had consistently consigned for years. This year, he admitted, he had fallen in, and he was prepared to face his loss. It was not fair that the present terms should be continued, and it was a matter the directors would have to take into consideration in the near future. The directors had made satisfactory arrangements for the disposal of the output this year. . Of course, such a firm as that arranged with would not take over on a falling market, everything that had been hung up for the whole season, and it would have been unreasonable to expect it to do so. The reeult was that the company lost money on that account, as the balance-sheet showed. Mr Leary also said that .in view of the fact that all the territory had not yet been touched by the canvassers it was hoped the directors would* soon be in a position to buy out all the dry shareholders.

: Mr 6. Thorp asked if the logs of £4,000 was made on lambs'or stock taken over by the company - from producers, or was it made dn ; stock'Bought by the company for certain exporters? The Chairman said the loss was; made through stock that was hung up, by»producers. The exporter took the ■ 75,000 he agreed to. at the beginning, of the season to take. QUALIFIED CONGRATULATION.

Mr James Begg congratulated the directors on the large amount of stock .dealt with in the works. It seemed it only required his resignation from the directorate to make the shareholders send along their stock. If that ■were the case, he was glad he was off the board, and it might lead to further . good results if some : of, ;the remaining directors would'-resign. - (Laughter.) He was afraid, however, he could not -congratulate the board on the monetary results. With an output of -160,000 carcasses . the directors. -had done no better than-the'previous year, when the Jbutpiit,. was ■ 90,000. -He ■ trusted the- directors' would take every

precaution next year to see that there was no recurrence of the losses made this year. He agreed with what Mr Learyhad said as to farmers. consigning through” the company.' The policy of the board in that respect was wrong

Consigning by farmers was praca dead letter all through the dominion now, and he would he pleased if the directors would given an assurance that they would not risk the company’s money by giving subsidies to fanners in that way. He did not regret that he had left the board Last March he made some harsh remarks, but. he saw no occasion to apologise for them. The apology would come in good time if it was evident that the promises to support the company had been kept, and that the dry shareholders had been bought out. One of the conditions had been fulfilled, but the other had not been fulfilled yet. The settlors, it seemed to him, were now in a mood to assist the local freezing works. He hoped the mood would be fostered by the shareholders and the directors, and if it continued for a few years the company would be free, of its financial difficulties. He supported the decision of the board not to pay a dividend this year. The company should have la substantial reserve to meet the ups and downs that '.were sure to come in a business of that kind. In reply to questions,' the Chairman said that the company took over 18,000. carcasses,’ and 48,500 were consigned. They could not find a buyer for the stock they took over, and they had to take it at schedule rates. , * ■ The report and balance-sheet wore adopted. Messrs John Cochrane (Awamunga), Edward Murney (Tapanui), and Richard Yardley (Heriot) were elected ,to the directorate. Mr T. Russell moved* a vote of thanks to the directors for the way they had carried on the works, remarking* that although a loss had been, made such things happened when least expected. The motion was carried by acclamation.—The chairman, in reply, said it;was- very pleasing to the direct tors to; receive the thanks of the meet-’ ing , ■■■■ ' Messrs Barr, Hercus, and Co. were re elected auditors. The honorarium of the directors was fixed at £75 each.—An amendment to reduce the amount to “less than half ” was lost, Mr Jiunes Begg said that, on behalf of the shareholders, he wished to express high appreciation of the work, of , the Retention Committee, notably Messrs Sim, Murney, and Cochrane,-in carrying on the work entrusted to them in March. These gentlemen had done' valuable work in securing guarantees, of stock for the works—Mr Revie seconded the motion. He said it was owing to the efforts of the three gentlemen named and the Retention Committee that the shareholders had been able to retain the works as a farmers’ concern.—The motion was carried by acclamation, and thanks .Were also accorded to Mr H. Hutton (of Balclutha) in connection with the matter. „