COMMERCE AND FINANCE

Otago Daily Times, Issue 21784, 25 October 1932, Page 11

COMMERCE AND FINANCE

; PUBLISHING PROFITS '"-Improved-results are shown by Messrs Angus and Robertson, Ltd., Sydney, the Well-known publishing and bookselling aompany, for, the year ended June 30. A'net'profit of £5622 contrasted with a loaa of £I4OB the previous year. Dividend ct 8 per cent, on first and second preference' shares, less statutory deduction of SM per bent., absorbs ■ £3325. Ordinary »nd employees' shares, on which no: dividend was paid last year, receive 2 J per tent, this year, requiring £2036. The balance increases the carry forward from IMJ to £llß4. For 1930 the company paid 10 per cent, on its ordinary shares, and carried forward £6331. METAL MARKED BRITISH IMPORTS. Statistics published show that, despite the increase in Great Britain's requirements of base metals because of the industrial stagnation of the last two years, Australia has been able to increase her ■hare of that market. This has been particularly so with lead since the duty of 10 per cent, was imposed on imports of that metal into Great Britain from outaide the Empire. .How Australia has helped to supply Great Britain with metah in the last three half-yearly periods is shown in the following table: — ibll? .';'.!■ *._!■ ■ ''.'.':V Half-r*u ended ■:

THE HEMP MARKET< . .":A BUpbtbf fetter demand for... New Zealand hemp has been, experienced; during the. pait few weeks, with the result that bfce or two mills.in the Mariawatu district' have been encouraged to open, but the;'prospect» of "the industry are still uncertain for maintenance of a steady demand. rExport prices are approximately £lil sa-;*.tof- foVhighjfairy:ill for-Inw and £lO iplus ithe ObvernPETROL ','•■ \'ON'' ; dALB : iNSipNBr. '"■. The first shipment of Bumanian petrol •ifiyed" jn Sydney: on Qfetober 1 (states the Sydney correspondent of % the ; Melbourne Heraidj<m;,Octbbei; ,3)i and was available .to motorist* it U; : $&» *aU on « The importer! say that in a few weeks it will be obtainable at pumps within a 50mile radius of the city, and in a; month or it will be selling throughout tbo Btife;-.,Mr'Murrty, Little, manager of Independent Oil Industries, Ltd., which the petrol, said that 2,000,000 fillooi would be; included in the. first ■hipment, which was aboard the tanker Woensbrecht \ The-tanker Will berth at Glebe, thei petrol will be' conveyed to the(company's storage tanksin Federal by. a 6in. pipe*line-a- mil« •ufra-haif in length. Mr Little said that the petrol had bought'in London from IBni^h''owners 6t Rumanian well's, and contractshao/jbeen arranged for fut- .;. tS«r^BuppUcs.;,. : ;'.,'^;^:^'•. u '•.,'■■• ■'-',.'{ PRICES FIRMER >Priy,ate cablegrams received in -Wellingweek.report that the ; Colombo te#market>at the.v usual auctions was very strong for alt-descriptions, especially for common and low medium teas,, which advanced $ to id -per lb;;: quality con* tinues " useful." Calcutta cables advised « strong market for common teas, which Were generally v ld dearer. Quality was ImprbvinV. rapidly. above are advances :bn>tbe,pwvlbus week's quotations. The London market waa dearer for both Javar and Indian teas, being fully id higher than a week earlier. ■ :■:■.

LOCAL AND OVERSEAS MARKETS.

COMPANY BALANCE SHEETS THE DRAPERY AND GENERAL IMPORTING COMPANY OF NEW ZEALAND, LTD.

The net profit for the past year having shrunk to £2869, the holders. of ordinary shares do not receive a dividend, while the payment of the preference share dividend is made possible by drawing upon •reserves for over four-fifths of the sum required. A floating balance, reduced to £28,299, is carried forward to the current season. " , . . , It is the pronounced reduction in the expenditure that has enabled a surplus to be Shown for the year. Expenditure, the nature of which is given in detail but which is grouped in amount comes to £193,834 or more than £40,000 under that of 1930-31. In its .relation to the gross profit it stands at 98.54 per cent, as against 86.43 per.-.cent, and 92.48 per cent, for 1929-30 and 1930-31 respectively. It is necessary to go back-over 10 years to find a gross profit below that of the past season. Accompanied by an equally decided drop in the expenditure, the question may be, asked, whether there has been, some regrouping of the .expenditure; and whether :items formerly debited to profit and. loss account have been charged to trading account. ... Among the liabilities the bank overdraft has risen to £48,702, or to approximately four times its figures :of 12 months ago- The increase, however, is more than compensated by the reduction in sundry creditors so that the outside indebtedness has been reduced from £280,2/2 to £259,745. It does not appear in what respect the interest bill is affected by the alteration. ' In sundry creditors, amounting.to £211i043, there is-room for considerable diversity in composition, but that section which consists of accrued charges such "as wages and taxes may be expected to show a considerable decrease. Reserve account, at £85,248, shows slight increase, as'Usual, without the source of supply being disclosed. The floating- balance, in Spite of the'demand updn-it to make up the preference share dividend, still standi at the- substantial sum 0f'£28;299. rThe advantage of-main-taining the undivided surplus at a large figure proportionally to the other reserves is apparent in the present instance, when a -withdrawal of over £12,000 can be made without general reserve being affected and leave an. appreciable sum still available. At their total of £113,547, visible reserves compare favourably with their figure prior to 1929. : The fixed assets have fallen to £561,270, presumably as the result of. the depreciation allowance, . the amount of which., is not .stated;- but which has -been, applied to- buildings,, fixtures and ;.plant. Or the three 2 sections, buildings,' with the land they occupy, will represent the predominant share, while, the rate of their depreciation allowance will be the.lowest. If it may be assumed that not less than the reduction of £13,000 can be- attributed to the allowance, the average rate would • permit of a generous provision to the other sections after provision for current rates on the buildings. It is unlikely .that there U much in the way .of ; machinery to be considered, so that the most rapidly deteriorating part of the fixed assets will be: comparatively small. Thev-large- extensions have taken place in the. fixed assets in recent years make a heavier .demand upon the expenditure,. which, at the present junc-. ture.is nofc.compensated for by increased profits. ';* ;,*." ■ • ■•' - , s .'ln sympathy with other figures, sundry debtors at £69,621 are. down. Full provision has been made for bad and doubtful debts, although neither the amount nor .the fact is mentioned in the accounts. Stocks and shipments afloat, which are reduced to £174,500, represent approximately 89 per cent, of the gross profit, as compared with 72 per cent; at August, 1931. Their reduction in book value may be: due more, to a rigid valuation than to>any decrease in quantity. The question >of exchange; however, which;comes into operation to a certain degree,, will tend to raise the figure, Investments - have risen to £5867, but no indication of their character is given. The assumption is that they are retained for some, specific purpose, to which both principal. and interest are being applied.. In. the group of sundry creditors there is room for a corresponding liability. 1 While generally k speaking there has been a contraction in most of the items, there is no great difference in the aggregate. With a declining profit and Uncertain outlook, the directors have prudently abstained from recommending a dividend on the ordinary shares, and in their action will doubtless..have the ap- ; proval of the shareholders.

SOUTH OTAGO FREEZING COMPANY, LIMITED

This company has been able to present to its shareholders for consecutive year the uncommon but all the more gratifying result at the present time of an increasing net profit,- The figure of £6148 which is brought out, if not a record one, is the highest over the past. 14 years. A dividend of 7 per cent, leaves £1507 to strengthen reserves and doubles the floating balance by bringing it up to £2982., < The gross, profit,-before allowing for the estimated loss of £7OOO oh. advances to owners without recourse, comes to £29,773. The increase, over that of 1930-31 appears greater than the larger stock treated or a lower wage bill would.make possible, so it would seem that some additional profitable outlet has been. found for the company's . activities- ~ Disbursements aggregate £16,626, of which depreciation claims £SOBO and the income tax provision, £3700.. In.its relation"to gross profit, expenditure for the past, three years has stood as follows: ■ ■ - Qrosa

• After deducting estimated loss on advances to owners without recourse. The fixed assets having been liberally dealt with by the depreciation allowance, each group is smaller notwithstanding the additions effected during the year. Land and buildings have" been subjected to &o per" 'cent: 'allowance,' reducing • them to £50,132. Whatever the proportion of the separate items may be, such a generous allowance over the whole is equivalent to making a substantial contribution to secret reserves. In plant and machinery, now standing at £19,074. the rate averages 11J per cent., so that there also the current depreciation rates have been exceeded and hidden reserves strengthened. The aggregate of £69,206, when accompanied by a small stock, places the fixed assets in a favourable position towards the total assets. Among the liquid assets, sundry debtors at £11,020 have risen slightly. The bad debts charge of £26, or barely J per cent., of the outstanding book debts at the close speaks well for the supervision, exercised. Money in bank continues to rise, and with £SOOO out of £B9IO earning interest on fixed deposit the cash assets seem well able to cope with all ordinary demands. Stocks and materials, which are usually small, are down to £5902, in spite of the enlarging turnover, from which it may be

inferred that stock gets small opportunity to accumulate. The preponderating asset —advance to owners without recourse—at £106,154 considerably outstrips its figures for the past year or two. Taken in conjunction with drafts against consignments (£100,299), the margin is not great, having been diminished by an estimated loss of £7OOO on advances to owners being taken into account. The fact of such an allowance being considered necessary, owing to the depressed overseas market, illustrates the importance of this item as the one on which the prosperity of the undertaking depends. Apart from drafts against consignments, the liabilities are comparatively small. Sundry creditors, which account for £10,546, continue to rise, and, when income tax reserve of £3911 (which may be taken as the allowance reserved to meet the income tax due) is added, the total comes to £14,457. This growth of recent years may be taken as one outcome of the larger business transacted. General reserve, at £12,141, is unchanged. With the utidivided surplus of £2982, the aggregate of visible reserves stands at £15,124, or higher than it has stood for seven years. In their relation to the paid-up capital, reserves are equivalent to 22.81 per cent. During the past 10 years the amount of paid-up capital has varied little. It seems well able to cope with the needs in the meantime, and the return it is offering to the shareholders is satisfactory. During the same period the company has experienced its vicissitudes, but it is encouraging to learn of its present progress, which, supported by the producers of its district, it is hoped may usher in an era of prosperity.

PRICE OF SILVER (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) RUGBY, October 22. Silver: Spot, 17 11-16 d per ounce; forward, 17 13-16 d. AUSTRALIAN STOCK EXCHANGES (United Press Association.) (By Electric Telegraph—Copyright.) SYDNEY, October 24. (Received Oct. 24, at 11 p.m.) The turnover to-day was smaller but prices showed little variation, although there was a decline in Commonwealth bonds. After allowing for accrued interest most of the issues closed below par. The following sales were made:— Bank of New South Wales £32 10s, Colonial Sugar £55 15s, Adelaide Steam 22s 6d, Australian Gas A £6 18s 6d, Tooths 37e, Tooheys 22s 9d, British Tobacco 375, Dunlop Perdriau 18s, ditto Pref. 325, Australian Glass.46s 9d, Winchcombe Carson 24s 3d, Electrolytic Zinc 19s l_d, Henry Jones 38s, Broken Hill Proprietary 28s Hd. Bonds (4 per cents.) 1938 £lOl 12s Cd, 1941 £lOl 15s, 1944 £IOO 2s Od, 1947 £IOO 3s 9d, 1950 £IOO 10s, 1953 £IOO 17s Od, 1957 £lOl 15s, 1959 £IOO 2s Cd, 1901 £IOO Is 3d, MELBOURNE, October 24. Commercial Bank of Australia 17s 3d, North Broken Hill 74s 9d.

GOLD PRODUCTION AUSTRALIAN REVIVAL. Australian gold production to the end of 1931 was valued at nearly £640,000,000, states the Age, Melbourne. That amount had been won since 1851, in which.year the value produced was £1,348,000. In the following 12 months over £12,000,000 worth of gold was mined, but the best year was 1903, when, owing principally to the activity on the Western Australian fields, the gold yield of the Commonwealth was valued at £16,302,000. From that year, however, the yield steadily diminished in quantity and in value. The £10,000,000 mark wa ß last touched in 1910, and in recent years the industry reached a very low ebb. Interest in gold mining has been restimulated because of-the premium on gold and of the .unemployment problem. 'ln the last two-years companies have been formed to work old leases or to exploit new.ones, and with the assistance of unemployment relief funds many have taken up prospecting. The result has been that the drift in the gold mining industry has been checked, as revealed by the following figures:—

~ *Slx months only. ,t Approximate. Owing to the fluctuating price of gold —the Mint price is now about £7 7s a fine ounce—the best basis of comparison is in regard to the qquantity of gold produced. It will be seen from the foregoing table that in 1931 there was a substantial increase in output, and for the first six months of the present year the total was considerably more than half that for the whole of 1931. The quantity produced last year was the highest since 1j24, when the yield was 075,937 fine ou'S;es. The search for gold had proved useful and profitable in relieving unemployment. In Victoria since 1930 grants aggregating £26,041 have been made from the unemployment relief funds to 1799 parties, comprising 4544 miners. Some of the parties, however, received several grants. From the same source sustenance amounting to £45,700 has been paid to prospectors, who have been provided with tools valued at £BOOO and with railway tickets estimated at £2OOO. Perhaps the best idea of the increased activity in the mining sphere may be. gathered from Treasury figures, which showed that during the financial year 1931-32 about 25,000 miners* rights were issued in Victoria* compared with about 16,000 in 1926-27.

Importi Into Grwt Britain. ... Jum!0, . Dec. 31. ■ 1931. lUM SO. ; 1981 : s T0Di. hmd-r, .'■'..-•'"". AiutttUm .. .. Umbo*/v.-'.. Vv M.TT8;' 7??fi,droy 108.256 ' 7U7II Aiutnlte .. .. ffilftHM .. .. .. J1.S05 .. GJ.590 0.901 . 84.709 14.839 44.498 Atntr»|l» ".i ... KUewbet* .. .. .. W.770. G.033 84.584 4,004 51,8512

Aug. Paid-up Gross Net Dividend 20. Capital. Reserves. Profit. Profit. Ord. i ■ £ £ £ p.c. 1018 241.973 86.344 150.041 22.884 8 1920 354,687' 113,438 184.700 37,100 •10 1022 427,153 , i 20,088 229,287 ■ .10.242 ■ 5 1024 427.004 52.282 249,093 42.824 •9 1020 428,030 , 80,904 259,447 48.982 10 1027 428,337 100,981 253.574 40,873 10 1028 428,540 110.020 242,015 42.728 10 1929 428,875 125,049 209,342 45,027 10 1030 429,337 133,279 205,847 +40.147 10 1031 429.564 125.574 255.058 10.227 / 8 1932 .430.922 113.547 190.089 . 2.869 — • Incl luding bonus, t Sul jject to a reduction of £3100 al Income tax. f< ii addition

Paid-up Gr6sa "Net DMAUJ. 31. Capital. Kcservcs. Profit. Profit* dend. £ £ £ £ p.c. : 1919 . . 67.694 7,508 29.001 . . 4.827 t8 1021 . . 00.290 ; .7.854' 30,393 5,081 t8 I 1023 . . 00.550 20.098 j 18.828 '4,059 6 1925 . . 06,597 WW '6.'778" •3,587 ■ — 1928 . . 00,597- ' 12.141 5.878•5.018 — 1927 . . • 06,805' 9.902 8,001 •2,239 —' 1928.. . C6.305 12.-492 •10,380 2,590 — 1929 . . 66.S05 14,057 10.439 2,105 — 1930 . . 00.305 12.400 16,712 1.065 5 1931 . . -60,305 13,017 10.905 5,189 v ' 6 ' 1932 . . '60,305 15.124, 22,773 6.148 7 * ■ • Loss. t Including 2 per cent, bonus.

Expenditure. Profit. Itatlo, £ £ p.c. 1920-30 .; . .. 15.047 10,712 93.02 1930-31 ., ,•-.. 11.717' 10.005 60.31 1931-32 . . .. 10,620 •22,774 73.00

Australian Production Value Fineoz. £ 1925 .... .. .. 559,188 2,375,280 1926 .. .. .... 521,315 2,214,401 1927 .. .. .... 508;291 2,159,070 1928 ..... 457,669 1,944,054 1929 .v .. 427,159 1,814,457 1930 .. .. .... 466,579 2,099,605 1931 .. .. .... 591,742 4,137,000t 1932* .. .. ".. .. 33i,921 2,400,000t