COMPANY BALANCE SHEETS.

Otago Witness, Issue 3610, 22 May 1923, Page 5

COMPANY BALANCE SHEETS.

WRIGHT, STEPHENSON, & CO. (LTD.).

Considering the adverse circumstances, now happily showing signs of clearing away, under which produce companies have been labouring, the above figures exhibit a steadiness that is surely remarkable. Instead of the word “loss” being written against any one year, Wright, Stephenson, and Co. (Ltd.) have been able to show a substantial profit, and to pay an even dividend of 7 per cent, to the ordinary shareholders after allowing 5J per cent, to the preference. The indebtedness is mounting up, and some of it carries a fairly high rate of interest with it, but on the other hand the cash assets are also increasing in conjunction with the company’s invested funds. Perhaps the three seasons under review are barely sufficient to afford a comprehensive view of its career, and the years that went before may have indicated a greater financial prosperity on the part of this concern. But for a produce company to hold its own in the lean periods through which the country has been passing is no mean achievement, and,is a favourable augury for the future. The profit earned has not been equivalent to the amount distributed in dividend, and on this occasion, as on the previous two, reserves have had to be drawn upon, but not to the same extent. No details are given of the figures that go to make up the profit, but shareholders are informed that provision for bad and doubtful debts, and depreciation have had attention. It would be interesting to know what percentage on the turnover a net profit of £30,091 represents. Apart from general expenses, the hand of the tax gatherer must have lain heavy upon the company, while the provision for bad and doubtful debts on a total exceeding £1,100,000 must be considerable, unless experience in this respect has been exceptional. The capital is divided into preference and ordinary shares, the respective amounts being 46 per cent, and 54 per cent, of the whole. Founders’ shares have now disappeared from tho balance sheet, an amount having been appropriated two years ago for cancellation of the special rights attached to them. The figure for capital is now closely approached by the debenture stock, which has increase 4 seme £99,000 during the past twelve months. This stock is placed in four classes, which collectively claim over £27,000 annually in interest. What special terms may be attached to the payment of this interest is not clear beyond the fact that part is 5 per cent, free of tax, and the rest is at 6 per cent, and 7 per cent, subject to tax, but as a first charge on the profits, it means a weighty burden. Possibly this stock is held mainly, if not entirely, by shareholders. Sundry creditors show the large increase of £144,540 in twelve months. The bank overdraft, however, has vanished, and bills pay able are reduced. The item of sundry debtors (less reserves) is responsible for £1,172,418 —over one-half of the total assets. Shareholders would doubtless like to know how far these are secured, and to what period they date back, and also that the provision made for those considered bad and doubtful is ample. The wasting assets have all been reduced during the past twelve months, depreciation playing it 3 part. Stocks which had fallen a year ago have now risen. Advances made against produce awaiting shipment continue to fall, and although the balance on this account does not show an exceptional decrease, the figures concerned have been reduced to a remarkable extent during the past two years. A credit balance at the bank of £45,791 replaces an overdraft of £28,703. There is a large increase approximating £57,000 in the amount invested in shares in other companies. The total investments come to £236,019, of which £100,530 is earning war loans rate of interest, and the balance will require to produce something higher to make the average return from investments equal the rates paid for the debenture stock. It should bo noted that the war loan stock is entered some 10 per cent, below its market value, thus affording a useful reserve.

Paid-lip Debenture Net Dividend. ReCapita! . Stock. Profit. Pref. Ord. serves. Mar. 31. £ £ £ j).c. p.c. £ 1021 535,746 365,154 29,584 5£ 7 94.813 1022 538,410 400,829 25,392 5* 7 86,406 1023 538,114 499,828 30,091 5£ 7 83,152