D.I.C. LTD.

Evening Star, Issue 23100, 28 October 1938, Page 14

D.I.C. LTD.

RECORD SALES RECORDED " EXPENSES MOUNTING ALL THE TIME " LITTLE PROSPECT CF PROFIT INCREASE Although -sales wore the highest yet recorded h) the history of the company and gross profits the second highest, increased expenditure in every direction had brought down the net profit to a sum less by £lO6 than last year. Air P. L. Halsted, chairman of directors, told shareholders at the fifty-fourth annual meeting of the Drapery and General Importing Comoany of New Zealand Ltd. this afternoon'. “ The company has made satisfactory progress during the year under review, and the net profit, * after payment of municipal rates and making full provision for land and income taxes (£12.851). amounts to £38,389 9s. compared with £38.495 11s 5d last year. Sales were the highest yet recorded in the history of the company, and gross profits the second highest, hut increased expenditure in every direction has brought down' the net profit to a sum less by £lO6 than last year.” said the chairman, moving the adoption of the annual report and balance sheet. “ I have every confidence that this present year will again show an increase in sales, but I would caution you not to look for much, if any, increase in net profits. Our prices are kept as low as possible in order to meet all competition. and expenses are mounting all the time.”

Adding the balance of £44.276 13s 4d carried forward from last year, the amount standing to the credit of the profit and loss account was £82,666 2s 4d. The chairman expressed his confidence that the appropriation recommended bv the directors would meet with the approval of shareholders, and that they would share their satisfaction at being able to maintain the ordinary dividend at 6 per cent, and at the same time add £IO,OOO to reserve and increase the carry forward by £1,300 to £45.576 15s sd.

“ The present strength of the company is due to the conservative financial policy of the past, and I have no doubt as to the wisdom of that policy being recognised and maintained m the future.” Turning to the liability side, shareholders would note that the capital was unchanged and that the mortgage had been reduced by £o.ooo to £41.000. Sundry creditors, which included, two rears’ provision for income tax, at £163,553, were £55,756 higher than last vear. Owing, no doubt, to congestion in the Land and Income Tax Department, the company’s assessment tor 1937 was later in reaching them and the tax was only payable after the balance date instead of before it. which accounted for the greater part of the increase in the item. it had since been paid. Reserves: The plate glass insurance reserve had grown by £lsl. The company carried its own plate glass insurance. Contingency reserve was now £22,291, an increase of £1,251, and general reserve £39,999 12s 6d, an increase of £7,630. The directors recommended that £10.006 from this year’s profits be added to it. when it would stand at £50,000. If this was approved, the total reserves, excluding plate glass insurance reserve, plus the amount to be carried forward, would amount to £117,868, or equal to 23.9 per cent, of the company’s ipaid-up capital. On the asset side, it would be seen that land and buildings, fixtures and plant stood at £458,884, a reduction of £12.880 on last year. Liberal provision had been made for depreciation and all expenditure on new fittings during the year had been written off. Shareholders could accept his assurance that this item was well represented by assets.

Stock on hand and shipments afloat (£221.769) were heavier than last year by £395, a mere bagatelle. Their stocks were cleaner than over and were honestly worth 20s in the £. Shareholders were indebted to the general manager, managers, and staffs for this happy state of affairs. Sundry debtors, less reserves, £102,775, had increased by £7,823, due to the larger volume of credit business done during the year.. The general secretary (Mr Lee), and the four branch secretaries had given unremitting attention to that item, and to them was due the credit that the book debts were, if anything, worth more than the sum at which they stood in the books. Investments and cash on hand, £660, were £ll4 more than last year, and called for no comment. Cash on deposit was £47,350. The greater part was being so held in readiness for the payment of income tax, which was made a few days after the balance, and the whole amount had since been withdrawn. At the National Bank there was £7,940 standing to the company’s credit, whereas 12 months ago it was overdrawn to the extent of £12,715. “ Summarising the financial position, the company's indebtedness, including the mortgage, but apart from capital, amounts to £204,553, whilst its liquid assets—namely, stock and debtors, cash on hand, on deposit, and with the National Bank—amount to £380,197, thus showing a surplus of liquid assets over liabilities of £175,644, an improvement of £25,423 during the year.” The number of persons employed by the company during the year was 916, who drew £144,174 in salaries and wages. To them he wished to express on = behalf of the directors their most hearty appreciation of their work. He also wished to congratulate the higher executives, the general manager, managers, assistant managers, and their staffs on the satisfactory result achieved, as they realised that the welfare of the company depended on their planning, foresight, and attention to customers. As advised last year, Mr Crow s resignation had been accepted, to take effect as from August 20, and he had been granted leave of absence from February, 1938. His successor, Mr H. C. Harford, took up his duties as Dunedin manager in February, and was proving a worthy successor to Mr Crow.