COMPANY BALANCE SHEETS

Otago Daily Times, Issue 19804, 1 June 1926, Page 8

COMPANY BALANCE SHEETS

WILSONS (N.Z.) PORTLAND CEMENT (LTD.), • Paid-up Capital, £600,000. Marine in- Net. Reserves, surance. profit. Div. Mar. 31. £ £ £ p.c. 1920' .. .. 10,606 1921 .. .. 13,367 590 37,171 5 1922 .. .. 17,356 5,667 41,989 6£ 1923 .. .. 25,616 6,719 53,260 7J 1924 .. .. 34,824 8,127 56,708 7 11-12 1925 .. .. 52,801 10,534 67,977 8 1-3 1926 .. .. 79,212 17,145 86,411 10 With the exception of the year 1920-21, when the concern was in its initial stages, the annual increase in the net profit is the largest recorded since its inception. The rise is £18,434, equal to slightly more than an extra 3 per cent, return on the capital. The full return is raised in consequence to 14.40 pet cent., out of which shareholders receive 10 per cent. A sum of £25,000 is being eet aside to form the nucleus of a reserve fund, and the balance of £l4ll is allowed to remain and swell the carry forward The customary policy is being followed of allowing both shareholders and reserves the benefit of the larger surplus, as will be seen in the columns below —viz.:

Although about four years ago the margin between return and dividend seemed to be wearing fairly thin, the proportion eet aside tor retention in the business has not looked back since then, and each year has not only increased its share of the return, but has raised its ratio in its relation to the dividend. The profit and loss account, as usual, carries brevity to an extreme, and it is necessary to turn to the directors' report for further enlightenment. It is there stated that the provisions for depreciation, bad debts, and taxes, which are referred to in profit and loss account are “ample.” Why stress is laid on this point now and not in the preceding seasons is not apparent. Except the above-named provisions, no item of expenditure is referred to in the statement- of profit and loss, which deals mainly with a few balances. The most noticeable feature about the balance sheet is that while the assets “in toto” have increased some £37,000, three out of the five items, or groups of items, have dropped, sundry debtors have remained practically stationary, and the rise in the fifth not only counteracts the fall in the others, but gives the total a marked advance. The fixed assets group is down to £415,860, or reduced by practically 5 per cent. In view

of the property embracing items such as land of varying tenures, deposits with an uncertain duration of life, vessels, and “etc.,” and no indication given of the respective proportions, it seems to the outsider wellnigh impossible to tell what an adequate annual allowance would be. The foundation of the structure would appear to bo the limestone deposits, as, if these were to be exhausted, the rest, being appurtenances to them, would be appreciably affected. Expenditure to a certain extent has doubtless been capitalised during the year, and any such has to be added to the 5 per cent befoie the approximate depreciation can be arrived at. In relation to the total assets, the figures compare as follows—viz.: Fixed Total Ratio assets. assets. p.c. 1918- .. £543,275 £638,133 85.13 1919- .. 530,651 545,266 82.27 1920- .. 522,515 709,326 73.66 1921- .. 501,295 733,501 68.34 1922- .. 445,203 733,427 60.70 1923- .. 414,460 736,541 56.27 1924- .. 437,270 757,959 57.69 1925- .. 415,860 794,935 52.31 The continuity in the decrease which was broken during the prior year has been resumed. The two other diminishing groups on the same side of the balance sheet are stock and the cash and bank balances. The reduction, however, is comparatively small in each case —some £9OOO and '£17,000 respectively. “Sundry debtors" at £81,758 has varied by some hundreds of pounds only, and in an upward direction. Consequently, when the investments group consisting of Wilson Col lieries (Ltd ) and, New Zealand Government Inscribed Stock has risen £83,600, some further cause must be looked for than the diminution of the others. The relative entry in the prior year’s statement of accounts was "Wilson Collieries (Ltd.) and other investments," and the increase may be partly due to profit on investments realised in the interval. The alternative conjecture is that the holding in the subsidiary company of Wilson Collieries (Ltd.), which means that entire company, has appreciated to a remarkable degree during the period under review. . Liabilities to outsiders are comprised in the item of creditors amounting to £63,578. The variation in this item has been small in recent years. Provision for tax is included, but it is not mentioned if the bad debts allowance is also contained here or if it has been deducted from sundry debtors on the other side. Marine insurance account has grown to £17,145, its latest year showing the largest annual _ rise in its history. It would he interesting to know how this figure compares with the book value of the company’s fleet Reserves bv reaching £79.212 have also made a record advance. A special reserve account has been opened bv a first instalment of £25.900, which may bo treated as taken from the 1924-25 surplus. The unattached reserves amount to slightly more _ than double of the new account, the formation of which has not depleted them. The total is equivalent to 13.20 per cent, of the paid-up When this company closed its books at March 31 last, it could look back upon a lifetime of seven years and 10 months. The management might be pardoned if it regardod its achievement? up to that date with some feelings of pride. The annual results point to a progress, the momentum of which is inclined to increase as time goes on and in this respect the vear 1925-26 compares favourably with anv of its r^cdpcesaors.

Return Retained on Diviin capital. (lend. business. p.c p.c. p.c. 1919-20 .. . . .. 2.15 — 2.16 1920-21 .. . 5.00 1.19 1921-22 . . .. 7.00 6.25 .75 1922-23 .. . 7.50 1.38 1923-24 .. . 7.92 1.53 1924-25 .. . 8.33 3.00 1925-26 .. . . . 14.40 10 00 4.40