HIGHER TRADING PROFIT

Evening Star, Issue 25633, 6 November 1945, Page 6

HIGHER TRADING PROFIT

D.I.C.'S YEAR REVIEWED

The operation of price control orders and subsequent increases in the wages bill which could not be passed on had precluded shareholders from sharing in the higher profits earned during the year, said Mr J. M. Paterson, chairman of directors of the Drapery and General Importing Company of New Zealand Ltd. at the annual meeting this' afternoon.

At present practically every retailer could sell more than he could buy, said Mr Paterson. Opinions differed as to when an improvement could be expected, but their company could do nothing more than pursue a policy of careful buyitfg of the supplies available. This policy during the last year had produced a gratifying increase in turnover and in gross profit. Trading profit was still rigidly controlled by price orders, however. Since the last prices were fixed there had been a general increase in wages, with no compensation; the trade had been compelled to carry the wage increases on a reduced profit rate that was fixed before the increases were made. This effect hod been accentuated by the return of many employees, with the result that the net return, in spite of increased turnover, showed little variation on the previous year. The net profit, ■ after making provision for depreciation and taxation, amounted to £35,702, a rise of £67 on the previous year. The reserves at £127,908 were higher by £7,097. In the case of contingency reserve, which stood at £28,817, provision had been made for certain maintenance work to be carried out in the near future. The reserves, plus the carry forward, amounted to £183,504, which was equal to 37 per cent, of the company’s paid-up capital. Assets were conservatively valued, said Mr Paterson. The investments included money at call, £20,000, war loan £20,250; and insurance policies £20,366. “ If we summarise the company’s financial position,” said Mr Paterson, “ its indebtedness, excluding capital, amounts to £185,000, while its liquid assets amount to £526,629, which showed a surplus of £342,629 and an improvement of £20,127 on last year.”