BRUCE WOOLLEN COMPANY.

Otago Witness, Issue 3828, 26 July 1927, Page 14

BRUCE WOOLLEN COMPANY.

MILTON, July 21. About 24 shareholders of the Bruce ■Woollen Manufacturing Company (Ltd.) attended an extraordinary general meeting of the company, held yesterday afternoon. Mr William Moore, chairman of directors, presided. The meeting was called to consider a resolution that the company’s capital be increased to £150.000 by the creation of 50,000 new’ shares of £1 each. Mr A. E. Stewart, one of the directors, in moving the resolution, remarked that those who had read the criticism in the Otago Daily Times at the annual meeting of shareholders would have noted that the article concluded by commenting that with the company’s present financial position it would not be long before it would require to appeal for increased capital.” The large amount of bank overdraft shown on last year’s balance sheet would not have been so high if the company had not been strong with its payments of good dividends and placing to reserve; also in 1921-22 allotting to shareholders an additional share for every five held. That was all right whilst business was good, and when the company was making excellent profits. There was a considerable amount of capital invested in the mill, and the company’s operations were of such extensive character that it had not at present sufficient working capital,

and was leaning on the bank to too great an extent. Since the shareholders several years ago authorised increasing the capital to £lOO.OOO, the balance sheets showed that the plant had increased by £28,999, premises by £14,854, and stock by £48,325. The company’s experience within succeeding years showed that the increase in capital was warranted. Recently, however, woollen mills throughout the Dominion had been “ right up against it.” The directorate of Bruce mills felt confident that trade would improve, and had recently entered upon different selling arrangements, which should procure for the company a reasonable share of whatever business was offering. He felt confident that in future years the company would reap the benefit of improved trade and altered selling arrangements. The reason in asking for additional capital was that the company would be working with shareholders’ money instead of advances by the bank. The mill was well equipped, and c«ild cope with additional trade, but was faced with the problem of not having a worsted plant. If such plant had been installed years ago the mill would be in a better financial position to-day, as at present they were handicapped owing to the trend of prevailing fashion for finer goods. If the shareholders granted the additional capital asked for the company would carry on with the best of machinery for producing the fashionable material in demand to-day. ami the shareholders would reap tlie benefit instead of the bank. He therefore moved the resolution that the capital lie increased by £50,009. The proposal. if carried, left the directorate to decide what class of shares should be issued. The resolution was seconded by Mr William M'Elrea (Dunedin), and after slight discussion was adopted without a dissentient voice. Another resolution was approved of unanimously altering certain clauses in the articles of association, to provide for payments only on the basis of paid-up capital, instead of dividends on the number of shares held irrespective of the amount paid up. This resolution comes up for confirmation at a later meeting. .Although nothing definite was announced by the directorate, it was apparent that the increased capital will be raised by the issue of -reference shares.