MARKET LEADERS

Evening Star, Issue 26103, 17 May 1947, Page 12

MARKET LEADERS

DUNEDIN’S GOAL INTERESTS WESTPORT AND KAITANGATA COMPANIES With the gradual elimination of the smaller concerns from the coal mining section of the Stock Exchange list, and Government purchase of privately-owned properties, interest has come to be focused on the Westport and Kaitangata concerns. Not only is Westport the largest capitalised of the few remaining companies, but in many ways it lias come to-be recognised as the leader of the section, and, so far as Dunedin investors are concerned, Kaitangat’a is a close second. More than £600,000 is tied up in the few remaining coal concerns, and the Westport-haitangata partnership claims about £275,000 of that total. Nationalisation of' coal mines has become a habit with the existing Government. and the acquisition of certain areas has been accompanied with sighs of relief by shareholders. Although Kaitangata has been remarkably free from industrial troubles (the recent stoppage was the first strike in 27 years), a declining output, rising costs, and price-fixing controversies have affected the picture. Kaitangata s average mining wages cost for 1945 was 17s 2d a ton, an increase of Is 4d a ton on the preceding year, which represented a difference of £B,OOO in the aggregate. The average earnings of miners at Raitangata in 1939 was 33s lOd net a day, but by 1945 the figure had jumped .to 51s. More recent returns would probably snow a further increase. INCREASING ABSENTEEISM. Westport’s chairman reported at the sixtyfourth annual meeting that absenteeism was causing most concern. “ A day off now and again does not matter ” (for the miners), said Mr James Begg on that occasion, “ but to mine production and mine costs it matters a lot.” Overshadowing those complexities, however, is the vexed problem of fixed prices and subsidies. Instances of inferior lignite coals fetching the same price as the best Westport coal have been quoted. Both Westport and Kaitangata have been granted subsidies within the last few years, but the spiralling wedge of higher costs fnust already be threatening that advantage. The glimmer of hope that has been kindled lies in the now-established fact of State ownership, and the Coal . Mines Council will be able to compare production figures and profit and loss accounts of the private concerns with returns made by State mines in determining pricing policy. EARNING RECORD. Westport’s earnings over a five-year period are compared below: — 1942. 1946. £ £ Gross profit ... ... ... 68,02*7 55,178 Net profit 14,723 14,966 Reserves 135,592 106,690 Output 285,872 164,291 The dividend was maintained at 10 per cent., with the exception of 8& per cent, paid in 1945. Over the same period the Kaitangata Company, which has a paid capital of £50,694 (against Westport’s £225,000), returned the following:— 1942. 1946. £ £ Mining revenue 37,252 26,388 Net profit ... 7,980 3,149 The dividend rate has varied. In 1942, 2s 6d a 16s paid share was distributed, 2s in 1943, Is 6d in 1944. and 2s in 1946. 1