RECORD YEAR

Otago Daily Times, Issue 23857, 11 July 1939, Page 15

RECORD YEAR

DOMINION BREWERIES INCREASED DIVIDEND BONUS TO STAFF "Trade is still increasing and to a certain extent the facilities of the company are still taxed to meet demands." This was the statement made at the annual meeting of shareholders of Dominion Breweries, Ltd., by the chairman of directors, Mr L. J. Stevens, in submitting what he described as the most significant annual report thus far rendered. "' Outstanding features in this report," continued Mr Stevens, " are the increase in dividend rate to the satisfactory figure of 12 per cent, per annum; the increase in the company's reserve fund to £100,000; and the elimination from the accounts of the company of the item of' goodwill, hitherto standing in the balance sheet «t the sum of £19,100.

"These features give evidence of the expansion and consolidation of the company's position forecast at previous meetings of the company. On this occasion the accounts of the company balance at the large figure of £622,113, or an increase over last year's figures of £141,346. On the assets side of the balance sheet, land ind buildings at cost, less depreciation and less mortgages, now stand at the net sum of £248,635 This .amount shows an increase over the previous year of nearly £50,000, while liabilities in the nature of fixed mortgages have increased by less than £20,000. "In other words, over £30,000 of the company's share capital has b*en invested during the year in freehold securities. Plant, machinery, furniture nnd fittings, at £194,084, show a substantial increase of nearly £60,000, due in & large measure to the purchase of brev'erj plant and machinery and r»irth«ot purchase of hotel furniture and equipment. Stocks, at £84,149, are upproximately C 27.000 higher than last year, while book debts have inTePsed by over £13,000. Both the etock and book debts figures reflect the larger volume of the company's business.

Writing Down of Leases

"Value of hotel leases, investments and advance payments, on the other hand, are nearly £SOOO less than last year. The decrease is due, principally, to a Judicious writing down of the »alue of leases. "On the liabilities side of the balance sheet an alteration of note is the increase in the subscribed capital of the company to the sum of £3oo,ooo—an increase of £50,000 in the capital of the company as at this time last year.

"Of the total sum shown on the liabilities side of the balance sheet, shareholders' funds, i.e., capital, reserve fund and appropriation account, amount to £442,841, or over 70 per cent. This, I claim, is the best possible evidence of the consolidation of the company's position, and a good indication of the merit of the company's shares as an investment.

"The profit and loss account shows the grdss profit earned amounted to £252,438, an increase for the year of approximately £104,000. I would especially draw your attention to this figure. In view of the increase in the company's capital, some addition would, of course, be expected in the gross profit, but I say that, without a product which meets and satisfies public demands, and a sales policy that is vigorous and persistent, this increase in gross profit would not have been realised.

Efficient Management

"And, with the increase in gross profit, efficiency and good management have secured to the company a most satisfactory realisation of net profit. At the sum of £65,477, the profit results for the year show an increase of over 50 per cent, on the results secured in the previous year. "It may interest shareholders to know that net profit has risen substantially in ratio to the increase in the company's sales. Actually, out of the total increase in the gross profit, additional expenses total 50 per cent., while additional tax provision and increase in net profit share the balance approximately equally. Every shareholder must appreciate this magnificent result, which, if not a record, certainly compares more than favourably with the results achieved by any other company trading on similar lines to this company. Chain of Hotels "Every department of the company contributed handsomely to the results achieved. In particular I would refer to the company's chain of hotels, which, by the provision of superior accommodation and refreshment, have secured to the company a very substantial trade and profit. The company is now satisfactorily placed in respect of guaranteed outlets, and the steps in respect taken by your directors to assure the company's future as a major industrial enterprise enable me to forecast a continuance of the results achieved during the past year. "Trade is still increasing, and, to a certain extent, the facilities of the company are still taxed to meet demands. I can assure you. however, that your directors adopt a conservative policy, and decisions only follow the closest inquiry and scrutiny by technical and business advisers of the company "Goodwill" Account Written Off "The recommendation of your directors to apply part of the year's profit to writing off goodwill appearing as an asset removes from the balance sheet the only item of an intangible nature. "Hitherto your directors have followed a policy of showing the amount of profits and share premiums applied by the company to reserves. With the reserve fund now increased to the large sum of £IOO.OOO, or 33 per cent, of the company's capital, your directors feel they may depart from this policy and apply £19,100 of the past year's profits in writing off the goodwill. You will appreciate that this is equivalent to carrying an additional £19,100 to reserves, which makes the directors' proposals as to appropriation of profits equal to one-half to shareholders and one-half back into the business. I am sure shareholders will approve of this recommendation

'Once again 1 would pay tribute to the skill and energy of the managing director. Mr Kelliher; at all times he is 'a tower of strength' to the company. To the executive officers and staff of the company, and to the brewery and store employees I extent the appreciation of the board of directors for their loyal services rendered during the year. This appreciation takes tangible form in a bonus to be granted to employees, for which provision has already been made in the statement of accounts. ''And now I move the adoption of the report and balance sheet. This motion carries with it the payment of the dividend for the year at the rate of 12 per cent, per annum, less interim dividend paid"