Page 14 Advertisements Column 3

Otago Daily Times, Issue 18293, 9 July 1921, Page 14

Report by “Cambist” concerning the issue of £300,000 7| per cent. Mortgage Debentures by The Gisborne Sheepfarmers’ Frozen Meat and Mercantile Co., Ltd.

(■ i ✓“> AMBIST” hag already taken notice of this f debenture issue in another place. To those Vw' persons who .may have missed his article, he now addresses himself, and in doing so, finds that what he has already put on record can be further emphasised by taking a wider range of the subject, and by delving deeply into numerous small but important details, which were missed in his first essay. It is only within the last few months that the name of the present company was extended to include the words “and Mercantile” in its title. Developments on the East Coast had rushed ahead so fast, that it is safe to say. that during the last ten years the fixed wealth of the district, and its surplus earnings, have increased many fold in volume. It is a misnomer to call this wealth-producing district, Poverty Day, for every record made of it. proves that it is a natural storehouse of every form of pastoral, agricultural, and dairying produce. The evolutionary movements connected with these matters, have made it necessary to bring about a huge merger of interests relating to the fundamental productions of the district. The freezing works at Gisborne, Hick’s Ray, and Tokomam Bay, are now placed under one control, and are sure to make good by this economical arrangement, which ensures the total vested interests in these concerns being better looked after, and more efficiently managed. The benefits to be derived from this branch cf the business will prove to be of first-class importance to the whole district served by the'eompany, and also to the intimate benefaction of the shareholders in thin concern. Then, there is the other side of the, company’s operations to consider, namely, the mercantile branch of the business. To reach this end, some private and corporate competing firms had to bo brushed aside from (he path of true progress. This company bought them out, and the whole of these valuable businesses are merged. A True Co-operative Undertaking. To the mind of this writer, the manner of achieving Hie present company is as wonderful as it is classical, in the records of New Zealand company promoting. There has been no inflation of assets for the purpose of making agreeable sales on behalf of disgruntled shareholders, who were to pass on their assets to the pew concern. Still more noticeable is the fact that not one penny has been paid for goodwill to any of the merged concerns. On the other hand, however, the large sum of £123.352 has been distributed as share capital, and that transaction means that the above sum of accumulated profits remains conserved in the shareholding of the new company. This kind of finance is peculiarly of a co-operative'nature, and it stamps at once the whole ventpre as a true cooperative undertaking. Any outsider, and particularly a prudent investor, must see how important this is for the future success of the company. Under the co-operative impulses of such a proprietary, every branch- of its co-operative undertakings is assured of permanency, growth of business, and (he elimination of competitive evils. In the days of competition between the merged companies £123,352 of profits were accumulated; how much better the position will be without that competition, “Cambist” is unable to say. One remark he will with safety venture upon, and that is, that the elimination of competition gives capital a positive assurance of the fullest returns possible under the present system that we live in; it predicates success from the very moment that competition is stifled.

Nature of Company. To make a short summation of the business side of the company offering the 7i per cent, debentures, it may be said that that business is divided into two branches, one of which is concerned with refrigeration, and the other with mercantile affairs connected with distribution, selling, and shipping. Those branches cover the full range of production and consumption necessary for the benefit of the individual, also the general stability and progress of the Dominion as a whole. The authorised capital of the Company is £1,000,000 in £1 shares. The present position is that the subscribed capital is now £637,136, and the paid-up capital is £395,754 10s. The uncalled capital is £241,382. Viewed as a local joint stock undertaking solely, this capitalisation entitles the concern to a high position on its own merits. The uncalled capital, spread over Its 1,600 shareholders, works out at £l5O per head, while the subscribed capital on the same method of computation gives £398 per head. This line of argument in a manner points to the fact, that the shareholders have so much at stake in the venttire that they must sooner or later put the quarter million pounds into the capital account that they are liable for. This is proof that the corporation is a virile association with plenty of financial blood running through it. The company question may be disposed of with these remarks. It has been shown that on every ground, co-operative and financial, its constitution is excellent, and that it bids fair to grow and to exist for all time.

REAL Debentures. Now comes the consideration of the class of debenture this coinpany is offering to investors. The debentures are real debentures, for they are secured by first mortgages to Trustees, for the debenture-holders, of the freehold and leasehold properties and plant of the company. The value of the security co;nes to £615,263 4s. 4d., and the debts chargeable against the pledge only amounts to £300,000. The Trustees for the debentureholdei's are the New Zealand Insurance Company Limited. To make the security as complete and absolute as human and legal cunning could devise, the Gisborne Sheepfarmers’ Frozen Meat and Mercantile Company, Limited, have bound themselves “not to create any mortgage or charge ranking in priority to or pari passu with the debenturc-holderS’ security over the said freehold and leasehold properties and plant.” In a word, the investors in these debentures are given an iron, grip over £615,263 worth of conservatively-valued assets, the bulk of which will appreciate with the rising values that must grow during the next ten years—the time of the debentures’ currency. 1

No Better Investment. “Cambist” is satisfied that no better -investment was ever offered in this country. Nothing could be safer, for the security is unimpeachable. He advises everyone with saved money to take up as much of this offering as they can afford to. The prospectus is worth reading, and what is more, it is bolieveable, every line of it. Seven and a half per cent, for ten years, free of worry, is better on the whole, than speculating in shares carrying a high premium. No doubt, when these facts get widely known, the whole debenture issue will be absorbed in record time.

GET PROSPECTUS TO-DAY from the Bank of New Zealand, any member of the Stock Exchange, or the Company’s Broker, Mr. W. Lissant Clayton, Gisborne. Enquire To-day! DIRECTORS: F. B. Barker C. A. de Lautour A. J. Cameron H. D.de Lautour John Clark J. W. Nolan F. Hall G. M. Reynolds H. Kenway H. Williams The Gisborne Sheepfarmers’ Frozen Meat & Mercantile Co., Ltd. GISBORNE.

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