LOWER OPERATING COSTS: HIGHER NET PROFITS

Gisborne Herald, Volume LXXVI, Issue 23043, 6 September 1949, Page 3

LOWER OPERATING COSTS: HIGHER NET PROFITS

Although gross profits for the year were lower by some £865, at £64,700, the working accounts of Messrs. Common. Shelton and Company, Limited, showed a higher net profit for 1948-49 than for the previous year. This outcome was one result of a lowering of operating costs, which enabled the company to show a surplus of £5063 in the Drofit and loss account, as against £5731 for 1947-48.

In their report to shareholders, now being circulated in anticipation of the annual meeting on September 20, the directors recommend an annual dividend of 5 per cent on paid-up capital, absorbing £I7BO, a transfer of £4OOO to general reserve, and a carry-forward of £2863. The proposed dividend rate is the same as for last year, and the transfer to general reserve will bring the reserve ud to £34,000. This figure is less than £2OOO under the amount of capital supplied to the company by shareholders.

Bank Liability Reduced

There was a small reduction in the amount paid by the company in salaries, wages and auditors' fees for the year, and in the provision for taxation. This latter item will still absorb £8496, however, or more than 25 per cent more than the net profit for the year. The principal savings made by the company are in respect of the general item of rates, insurance, interest, exchange, stationery, discounts, postages and telegrams, maintenance and repairs, advertising, rent and general' expenses. This heading covered an expenditure of £16,947 in the year 1947 48. and £15,851 in the financial year 1948-49.

The balance sheet shows a bank liability of only £3701. as against £17,389 last year, but money on deposit and customers’ current accounts represeui a liability of £13,317, and sundry creditors and provision for taxation represent another £31.863, both items having increased slightly from the previous year.

Total liabilities apart from shareholders’ funds represent £48.97,3, as compared with £59,709 at June 30, 1948.

Fixed assets are shown at a total of £35,943, comprising £.32.545 for buildings at cost less depreciation. £3350 for fittings, furniture and machinery, and £4B for shares in other companies. Circulating assets comprise £46,495 for stocks and materials, £40.553 for sundry debtors, and £232 in cash on hand. Stocks and materials are lower oy £6200 than at the 1948 balance, and sundry debts are about £I7OO up. The aggregate of fixed and circulating assets is £12,3,225. Directors who retire bv rotation at the annual meeting. and who offer’ themselves for re-election are Messrs. R. F. Hutchison and B. R. Fitzgerald.