COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19500, 8 June 1925, Page 6

COMPANY BALANCE SHEETS.

TJHB DUNEDIN STOCK EXCHANGE 1 PROPRIETARY (,LTl>.). Paid-up capital, £16,000; debenture issues, £23,000.

Happy in the possession of a property which the passing of time tends to appreciate rather than depreciate, this company is able to show in its results a succession of figures that keep mounting steadily higher. Outing the latest 12 months the pace has quickened and, at one stride, the net prout has increased to the extent of almost the annual return of a few years ago. The 1924-25 profit of £3600 is nearly GO per cent, in 'advance of that earned for the previous ysa!r and gives a return of 24 per cent, on the paid-up capital. When the financial year was six months old, shareholders received a dividend of 74 per cent, per annum, and a similar distribution has just been made, bringing the total to 16 per cent, for the full period. The balance of 9 per cent, is retained in the company’s hands, and reserves are strengthened accordingly. The rise in the gross income is not so marked as in the net. As was indicated in the directors’ report a year ago, the rentroll has be<m considerably enhanced and an increase of some £BOO has been brought about. Possibly there has not been sufficient time yet to allow of the full increase taking effect, and the current year may be able to show further progress in this direction. This rise on the credit side is assisted by the fall in the debits, no allowance naving been made for depreciation—a provision that has of late absorbed £BOO annually. Benefiting altogether to the extent of £I6OO, there has actually been a larger expenditure of nearly £3OO. Two items—vis., repairs and maintenance, £362, and directors’ fees, £2OO -j-are chiefly responsible for this difference, the rest which are fully detailed not exmbiting much alteration. The main source of indebtedness is the debenture issue of £23,000. As this is bearing interest at the low rate of 44 per cent., such borrowing is distinctly advantageous to the company. From the directors’ report, it is learned that these mortgages matured on the Ist Inst., and that satisfactory arrangements had been mode for financing this amount. Whether the renewal is in form of debenture or otherwise, it is more than probable that the rate will be raised to something more akin to the present market value of such securities. The other liabilities are sundry creditors totalling the greater part of which consist of accretions in debenture interest, rates, etc. The shares premium account remains intact at £2850, and with the floating balance bringp the reserves up to the figure of £403'2, equivalent to 32.21 per cent, of the paid-up capital. The increase of £1036 in the assets is attributable wholly to the liquid section. In spite of certain writing-off having been done, the revenue-producing items in the lattei class are larger by £ISOO, and the effect of this is seen in the profit and loss account, under interest received. The majot portion of the investments is now in deposits at call, and if these continue to grow at the rate they have been doing of late, a substantial sum will not be long in gathering. The banK balance stands at £1245 on the right side, enough to meet the second half of the year's dividend and leave something over. On this occasion the fixed assets are unaltered by depreciation and remain at £38,428, their figure of 12 months ago. If seems superfluous to allow for a wastage of approximately 2 per cent, annually when me property was far from deteriorating and actually rising faster in value. When not less than £BOO can bo added on to rents, some indication is given of the increasing capital value. As it is, the 1924-25 rents represent a return of 16 per cent, on the buildings and site, and it is probable that the full resources have not yet been tapped. it looks as if the shareholders possess something as stable as the city in which their - roperty is situated, and that the expansion one must bo followed necessarily by the appreciation of the other. '

Reserves. Gross Income. Net profit. Divfind. cum bonus. Apl. 30. £ £ £ p.c. 1919 3,850 4,503 1,499 12 1920 ... 3,653 4,996 1,603 12 1921 ... 3,543 6,124 1,690 12 1922 ... 3,266 6,324 1,898 12! 1923 ... 3,464 6,328 2,073 12! 1924 ... 3,432 6,621 2,267 15 1925 ... 4,832 6,373 3.600 15