REDUCTION OF PROFITS.

New Zealand Herald, Volume LXVIII, Issue 20840, 6 April 1931, Page 5

REDUCTION OF PROFITS.

COMPANIES IN AUSTRALIA. FIVE STRIKING EXAMPLES. [I'ROII OUR OWN CORRESPONDENT. ] SYDNEY, How severely business earnings have been affected l>y the general 6lump in the volume of trade in Australia is strikingly illustrated by the accounts of important public companies that havo just been , issued in Melbourne. Over a group of five companies profits for the year gave an average return of less than one-third of 1 per cent, on paid-up capital. The statements cover a wide range of industries and include companies with long-estab-lished connections and strong financial resources, which n)ig|it be expected to offer the maximum resistance to business depression. Despite drastic efforts at economy, a heavy reduction of earnings is revealed in every case, resulting in one instance in a direct loss of £II,OOO on the year's operations. None of the companies was able to pay dividends to ordinary shareholders, and. in three cases out of five the fixed interest payments to preference shareholders have fallen into arrears. Details of the five companies are Howard Smith, Limited, shipping and mine owners anil general merchants: — Paid capital, £2,250,000. Net profit, £IB,BOI, against £75,874 in 1029 and £161,3-18 in 1928. Return on capital, less than 1 per cent. No dividend on ordinary shares. London Stores, Limited.—Paid capital, £300,000. Neb profit only £2675, compared with £46,663 in the preceding year. Reserves drawn upon to pay preference dividends. No return to ordinary shureholders. Caledonian Collieries, —Paul capital, £1,487,894. Profit, £675. In 1929 a loss of £54,193, was incurred owiiuj to the stoppage on the Northern coalfields in New South Wales. No dividend on ordinary or preference shares for two years. Deficiency of £41,277 on profit and loss account. Pel a co, Limited, makers-of shirts, collars and pyjamas.—Paid capital, £244,736. Loss on year's operations, £11,325. In 1929 a profit of £21.031 was earned. Preference dividend paid tor only six months, and no distribution to ordinary sluuoliolders. T , , , D. and W. (-handler. Limited, hardware merchants, with city and country branches. —Paid capital, £176,750. Net profit, £2893, compared with £12.822 in 1929. Only half preference payment met. Nothing for ordinary shareholders.