WELLINGTON WOOLLEN COMPANY.

New Zealand Mail, Issue 1802, 19 September 1906, Page 21

WELLINGTON WOOLLEN COMPANY.

ANNUAL MEETING. Th© twenty-third annual general meeting of shareholders in the Wellington Woollen Manufacturing Company, Ltd., was held at the Chamber of Commerce on September 14. The Hon. C. J. Johnston, M.L.C., chairman of the board of directors, presided, and there wa-s a fairly large attendance of' shareholders. The directors’ report stated that the profit and loss account, under difficult circumstances, showed a margin of profit. In the two previous annual reports reference had been made to -the very high prices ruling for raw material, which had militated against the woollen industry here. This condition during tlio past wool season had been sharply accentuated. It is, therefore, gratifying to the directors that, after writing off £IOOO for depreciation of plant, etc., they are able to recommend to the shareholders the payment of a further dividend of 2£ per cent., making, with tho interim dividend, 5 per cent, for the year, and the carrying forward of £2OIB 4s 10d to next year’s account. The plant and buildings had been considerably to, as well as being maintained in a high state of efficiency. Two vacancies occurred on. the directorate during the year. The first, caused by the lamented death of Mr W. A. Fitzherhcrt—so long connected with the company—was filled by the shareholders electing Dr C. Prendergast Knight, LL.D. The second, owing to the departure from the colony of Mr A. E. Gibbs, who also was a director for a long period, was filled by the board of directors appointing Mr J. R. Blair. THE CHAIRMAN’S ADDRESS. Tho chairman, in moving tho adoption of the, report and balance-sheet, said:—As I had on previous occasions very fully explained those trade reasons which for the past few years have lessened the profits accruing in the manufacture of wool-, it is not necessary that, I should in this respect now do more than state that the adverse conditions, rather accentuated in some ways, notably by an award of the Court, which has increased our clothing factory wages by £ls per week, have continued throughout *}he year, and that the imports of woollens and apparel. large as they were, have increased. In regard to the balance-sheet and profit and loss statement under review, I desire to say a few words in explanation. On the debit side of profit and loss account, under the first hewing. “ interest, discount, etc.,” the total outlay is much heavier than usual. This i.s mainly due to an increase in the interest charge; consequent on the considerable accommodation required to provide for the larger and more costly stock both in raw material and manufactured goods necessary to eiiable us to adequately cater for a growing and more varied business. This matter is at present engaging the attention of the board. As another of those disadvantages we have to oontend with in competition with English and foreign manufacturers, we have to purchase in the colony our yearly requirements within a very short time, whilst elsewhere almost all descriptions of wool are obtainable throughout the twelve months. The difference in interest is considerable, and the convenience in only buying the exact kind of wool the fashion of the time requires ' is very great. Other items of our expenditure, such as salaries, warehouse expenses, and general expenses are-in excess of former disbursements, for tire reason that we are pursuing a more energetic policy in tho effort to capture trade. That there is not a corresponding increase in the gross profit on the credit side of the account is, in addition to reasons previously advanced, due in a large measure to the difficulty we experience in getting, or in training skilled labour. You can readily appreciate the resultant loss from an enforced use of highly paid but inexpert workers. We are to some extent getting ahead of this trouble, and your directors look to the future to give us that reward our greater activity and expenditure entitle us to expect. Our sales are larger than last year, and consequently there should be an average increase in the profits on manufactures, but unfortunately a sharp loss had to be accepted in connection with one of our branch stocks. We occupied an old building, and moth and silver fish had so infested the place that we had no option but to quickly dispose of the stock, which was much damaged. We have had, moreover, to pull down all the inside wood-work, and to thoroughly cleanse and restore same. Such a check in profit earning should not have occurred, and the directors _ greatly regretted it. To one other item affecting this year’s result I must allude. The provision for bad debts and discount .is £1795 IGs 7d. This is a larger sum than we usually allocated, and I am very sanguine that by some £3OO ht least the provision for bad- debts is excessive; but there being a doubt, the hoard deemed it wise to put the trouble behind us. Our contribution to depreciation is less by at least £IOOO, as -wo have already written off from

the cost of machinery actually in efficient working, no less a sum than £28,073, and from buildings, fittings, etc., £13,089, being a total of £41,702. Some of you may think that less even than £IOOO would have been sufficient, but the board had strong views on this point, and whenever ciroumstances permit, hope to continue the past policy of as rapidly as possible writing down tho book value of a plant which is liable to become less profitable by reason of new labour-saving inventions. I may mention that our landed property on which the mill stands, valued in our books at £1939, is valued by the Government at £4550. I have taken pains to give you full information. Any point not dealt with, and on which a shareholder desires knowledge, I shall bo glad to explain.

Shortly, i summarise the position thus: Not having received the full benefit of our recent large expenditure in new machinery, buildings, and other improvements, the charges against the manufacturing gross profits have told heavily against the year’s net result. Yet wo are able to meet an unexpected loss in branch stock, to set aside an unusually large sum for possible bad debts, to allocate £IOOO for 'depreciation, to pay 5 per cent, per annum to shareholders, and to carry forward over £2OOO.

Some six months ago wo were able to secure the services of Mr Brice, a gentleman well and favourably known in the clothing trade. As Mr Brice came to us highly recommended for capacity and integrity, you will be pleased to hear that in a report to the board he save: "Prospects for the coming year are in a satisfactory condition with reference to our trade in general: There i.s every hope that each department will show a good result.” Wo are preparing an exhibit for the Exhibition to bo held shortly at Christchurch, and I hope for good results from tho excellent material and make we shall’there display. Death and resignation during the year have deprived us of the service of two prominent members of the board. On February 2nd last Mr Fitzherbcrt so long connected with tho company both as chairman and director, died, and I but express the feelings of his lato colleagues when I say that we greatly miss his services and advice. On May 9th, Mr Gibbs, being appointed to a position outside the colony, resigned, and here, again, we lost the services of a zealous director. Mr Fitzherbert’s place was filled by. tho shareholders electing Dr C. P. Knight. The board appointed Mr J. R. Blair to fill the vacancy caused by Mr Gibbs’s retirement. Before concluding, I one" more desire to record the appreciation by tho directors of the services rendered by the responsible offiers, also of the efforts by the heads of departments to promote the well-being of the company. I now move the adoption of report and balance sheet, carrying with it ca dividend of 5 per cent, for the year. MISCELLANEOUS. The motion for the adoption of the report and balance-sheet was seconded by Mr Martin Chapman, and earned without discussion of any kind. Mr G. M. Kebbeil moved, and Mr C. H. Seville, seconded, that Messrs J. R. Blair and Arthur Warburton be reappointed directors.-—Carried with applause. Messrs Blair and Warburton briefly returned thanks. On the motion of Mr A. P. Maxwell, seconded by Mr F Polity, Messrs D. T. Stuart and Henry Keinber and Sons were reappointed as auditors of the company at a remuneration of 75 guineas per annum. At the conclusion of the meeting (which occupied a short quarter of an hour) it was announced that the dividend warrants would be posted to shareholders to-day.