MOSGIEL WOOLLEN FACTORY COMPANY.

Otago Witness, Issue 2437, 28 November 1900, Page 9

MOSGIEL WOOLLEN FACTORY COMPANY.

The twenty-seventh annual general meeting of shareholders in the JMosgiel Woollen FFa- t 'tory Company (Limited) was held at the com- ( pany's office, High street, on the 20th inst. i There were about 25 shareholders pre- > sent, and in the absence of the chairman of j directors (Mr John Roberts) Mr A. J. Burns presided. BEPORT. The following* report was presented: — The directors have pleasure in submitting the twenty-seventh annual report and balance j sheet. I The past year, owing to the very severe flue- J tuations of prices of wool, has been the most .; 'difficult one the company ever experienced, . and the directors are pleased that they are able to show the" result as Bet forth in the profit and loss account. • The profit and loss account shows a balance of £5716 12s lOd, from which has to be deducted the .34 per cent, dividend in May, leaving the sum of £3144 2s 10d now to be ' dealt with. From this sum the directors recoxn- j mend the payment of a further dividend .of 3| per cent., making 7 per cent, for the year, amounting to £5145, and. carrying forward the balance of .S-571 12s lOd to the new profit and loss account.- ' < , ' The^ retiring, directors are Messrs E. B. Cargill and H. F.", Hardy, both of whom are ! ' eligible _and offer themselves . for re-election. ! The auditors (Messrs -W. Hislop and A. Bartle- i man) also retire, but are eligible for re-elec- i tion. -x. The Chairman said : Gentlemen, I regret exceedingly that the chairman of directors is unavoidably absejit to-day. He has sent us a telegram from Middlemarch, saying: " Stuck here by slip on the railway line." I presume we will take the report as read, and in connection with it the chairman' has for- ■ warded some remarks he would have made if he had been present. This is what he says : " A few remarks are necessary by way of explanation in the balance sheet and profit and loss account, and I shall enumerate these as shortly as possible. In the balance sheet on the liabilities side it will be noticed that loans payable have been reduced by the sum of £300, caused by a" small loan being paid off. ißills payable are £700 less, a,wing to no shipments from our Home agent'being due at the .'and of the year. Bank account has increased •966172, which is the result of smaller business than we had hoped to do, and increased price of -wool. On the assets side book debts are a 54447 less, and goods manufactured and in iprocess, and raw materials are £10,049 more tfban last year. Both are the result of curtailed operations of the company. I may just (mention as regards the latter item that on two previous occasions this year's figures were exceeded, as in 1890 and 1891 they were £62,666 and £64,198 respectively. Shareholders, theretfore, need not be 'alarmed by this year's figures. In the profit ana. loss account it will he noticed that factory maintenance shows an increase of £259, which results from no 'special cause ; but .the sum of £2218 shows the cost of replacing everything necessary' for the year. Charges and salaries show a lessened 'expenditure' of £812, arising from our studyang economy as far as possible. Bad debts, •which have for so many years shown very email sums, show £220 this year, being a provision made for a probable bad debt. The Sialance of goods account shows a gross profit tigS almost an identical sum as was shown last

year— viz., £16,745, as against £16,856. At I last meeting I expressed a hope that the new j j year would be a somewhat less anxious one than the pa3t, but my. anticipation has not j been realised, as the year which we have now ] under review 'has been without exception the j most difficult one the company has passed ' through. Shareholders are no doubt aware j : that a very sudden and great rise took place in the value of wool at the end of last year. This unfortunately happened at a time when the company were compelled to buy a stock of wool equal to the full requirements of the j year. Had this great rise in A'alues been 1 | maintained, no difficulty would have been 1 experienced in securing the consequent increased price from our customers ; but a considerable reduction in value took place in the February London sales, and a steady decline has gone on since, resulting, in the case of merino and fine halfbred wools, of a fall of 45 per cent, from the highest point. It can be well imagined the effect such a state of affairs had on our trade by such an unparalleled state of the wool market, and the greatest difficulty has been experienced in procuring a very moderate increase in the value of the company's manufactures. The result has been that while our wool has cost us £6000 more than the -previous year, we have only been able to recover a proportion of this additional cost. "Very high values for wool, unless they become somewhat permanent, seriously handicap trade, and pioduce unprofitable results to all concerned. The work now carried on at the Kaikorai Mill has, as you know, been gradually curtailed, until now it is confined to the making of yarn only, and the directors are considering the question of removing the machinery now remaining there to Mosgiel, as considerable economies can be thereby effected. If this be decided upon, the land which the company now own at Kaikorai Mill will be out up for sale, and it should find ready buyers. All the mills continue to be kept up to the highest point of efficiency, and we are fully equipped so as to avail ourselves of any considerable increase of biisiness when it offers." — (Applause.) — Mr Burns continued : It is not necessary for me to say much to you, gentlemen. This telegram came to hand only this morning, and the directors and myself ■have not had time to collect our ideas on matters, because we generally trust all to the chairman on these occasions. I have now, therefore, simply to move the adoption of the report and balance sheet. — (Applause.) Mr G. Eliot Eliott : Sir, I beg leave to second j the motion. I think our annual report does not require any eulogy. It is good enough and strong enough to speak for itself. It is like good wine : it needs no bush. It is better than good wine. The wine that cheers the heart increases the pulse. I leave it, Sir, for others to nake further remarks on the report. The motion was carried unanimously, without further talk. ELECTION OF DIBECTOHS. Mr "P. G. Pryde: Sir, 1 propose the re-elec-tion as directors of Mr E. B. Cargill and Mr H. F. Hardy. I think they were two of the original directors, and shareholders cannot do better than re-elect them, as has been done on several previous occasions. 'Mr A. Bartleman : I second the motion. The motion was carried unanimously. Mr E. B. Cargill: Mr Chairman, I thank the shareholders for re-electing me as a director. As the. chairman has said, the past year has been one of considerables anxiety. I feel, however, that his remarks were somewhat in the minor key, and more so tfiaa th« "balg.nce

sheet renders necessary. It must be borne in mind that at the beginning of the j ear wo had the prospect of making a good profit, because we held a large quantity of wool which we had previously bought at low prices, and when the market rose 100 per cent, on some of the finer classes of wool we thought we would make a large addition to qur profits out of the increased value of our wools. But we had to go in and replenish our slock with wools that we had to buy at a higher price. Of course, people do not see these changes coining, and in Europe perhaps that is the case more than anywhere else. Then the price of wool fell until it reached a point not quite so low as before, but a long way below that at which we had been compelled to purchase. "What we really have to lament is not anything in the way of a positive loss of business, but we have been disappointed in not making the profit we expected to make out of the rise in the prioe of wool. We are back •very much where we were before. Probably we are scarcely so well off as before, but I would ask the' shareholders to bear in mind that in making up statements of this sort everything depends upon the valuations of the stock of goods and materials, which appear at the value of £59,217. The stocks of this company are always carefully and rigorously valued by the chairman and the manager, -who are thoroughly acquainted with every detail of the business, and the utmost care is taken that the valuation of stocks shall not be based on what they have actually cost, but j 'based on what the present value is and the \ prospect of realisation in the future. What lias kept this company straight all through these years has been great care in not overvaluing stock, but always keeping it down to a safe figure. That has been done on the present occasion. Had it not been done it would have been easy to make the accounts appear j more favourable than they now look. But the shareholders may rely on it that the figure here stated is one that ia safe, and one the company can work upon with perfect con- ! fidence in the future.— (Applause.) Mr H. F. Hardy: 1 desire to thank the shareholders very much for doing me the honour of again re-electing me to the directorate of the company. On the motion of Mr A. Melville, seconded by Mr A. Kyle, Messrs W. Hislop and A. Bartleman were re-elected auditors. COMriiIJtENTAEY. Mr J. Mitchell proposed a vote of thanks lo the directors and staff. Mr A. Melville seconded the motion, whica was carried unanimously. The Chairman, on behalf of the directors, returned thanks most heartily for the mark of confidence. As he had said, the past year j had been one of constant anxiety, not because there was anything wrong in the company's affairs, b\it because they had to buy their wool when the wool market had taken an unprecedented rise. As to their staff of employees, there was not a more contented lot of people in the universe. Not one of them would like to leave the company's service. — (Applatise.) Mr J. H. Morrison, general manager, on behalf of the staff and workers, desired to thank the shareholders for their vote. It was certainly regarded as a pleasure to be connected with the Mqsgiel Woollen Company, both by the workers and the staff. All took a great interest in the company.— (Applause.) It was now 27 years since the company was established, but every year it had gone on proving a steady interest-paying concern. He had recently been taking a retrospective survey, and lie found that the dividends duwiiK

the 27 years of the company's existence had averaged a fraction over 8 per ■ cent. — (Applause.) As Mr Cargill had said, Mr Roberts and himself (the speaker) believed in thoroughly going into valuations so as to buy the stuff for the following year as cheaply as possible, and thus provide for the dividend as far as they could. Last year was an unprecedented year. No one could foresee what would happen, but they hoped that next "year things would be a little better. He again thanked them on behalf of the staff and employees generally. — (Applause.) The proceedings closed with the announcement from the chair that dividend warrants were awaiting shareholders.