WRIGHT, STEPHENSON

New Zealand Herald, Volume LXXIII, Issue 22505, 24 August 1936, Page 5

WRIGHT, STEPHENSON

NET PROFITS LOWER HEAVY TAX PROVISION MORE THAN DIVIDEND PAYMENT After making provision for the higher scale of income and land tax, Wright Stephenson and Company, Limited, Wellington, shows a net profit of £-10,220 for tlio 15 months ended June .'tO, against £40,321 earned in the year ended March HI, 19H5. The company has now changed its balance dat» from .March HI to Juno HO. With £29,128 brought forward, £O9/618 is mailable. Preference dividend for 15 months at the rate of 5 per cent per annum requires £15.015, and £10,88!) is payable as ordinary dividend, being 5,5 per cent for the 15 months' period, or at the rate of 4} per cent per annum, against 4 per cent paid last year. The sum of £H7,114 is carried forward. Although the actual extent of taxation provision is not disclosed, the directors state that tlio increase in taxation is very heavy. Income tax with large companies is now 7s fid in the pound, compared with the old rate of 5s 10 l-sd, or an increase of 27.} per cent, while in the company's case land tax is approximately eight times what it would have been under the previous rate. Further, land tax cannot be deducted from taxable income, which means that income tax of 7s 6d in the pound has to be paid 011 the land tax. Formerly, when the graduated land tax was in force, a deduction of 5 per cent on the capital value of the land was made from the taxable income. Income and land tax combined now amount to more than the dividend to shareholders. Itesults for the past three years compare as follows: 1031 1035 1030 (15 in'ths) Brought forward Net profit .. 4 1.351 10,321 40,220 i 11.351 £5.3,030 £00,048 Dividends— Pref., 5 p.C. 18,738* 12,102 15,0151 Ord., p.c. 3 4 5% Amount .. 0,007 12,010 10.880 Carried forward £13,000 £20,428 £'37,114 "Includes 2"/ a P''r cent, 1033 arrears. o!j per cent to cover the 15 months. l'aid capital and general reserve are unchanged at £550,082 and £28,1H2 respectively. Debenture stock is £709 higher at £O-10,H79. Fixed deposits are £10,192 lower at £91,870. Clients' current accounts arc £73,125 higher, and sundry trade creditors £10,412 lower than at last balance. Subsidiary and associated companies' balances are down by £18,148. Fixed assets have been increased by purchases and additions, but this has been offset largely by depreciation allowance. Investments in subsidiary and associated companies show an increase of £26,776. Advance accounts are lower by £120,H23. The cash position is stronger, cash at bankers and on hand being £47,381 higher at £BH,HB(3. in addition, there is £67,000 out at short call, which sum will later be used to provide for farmer customers' requirements before the next season's returns come in. j