COMPANY PROGRESS

Otago Witness, Issue 3994, 30 September 1930, Page 62

COMPANY PROGRESS

THE CO-OPERATIVE FRUITGROWERS OF OTAGO, LTD.

* Ten months’ period. t Loss. Chiefly owing to unfavourable climatic conditions, the quantity of fruit handled during the past year has been considerably reduced from that of the year preceding. The net profit of £167 is in consequence not only well under that recorded for 1928-29, but is the lowest since 1924. For the second successive year, shareholders have been disappointed in their hopes of a distribution after apparently a dividend-earning era had been entered upon. The sum of £2OO transferred to bad debts reserve not only absorbs all the net surplus, but draws upon the floating balance, which, now reduced to £ll7, is carried forward to the current season.

The smaller surplus is not attributable, to increased expenditure. A curtailment of over £4OO has been effected in the charges, which are detailed in their usual comprehensive manner. Salaries and wages aggregating £4OOB constitute the main items, but interest at £856 has to be reckoned with. The greater part of that sdm is claimed by the mortgage, while there are the debenture-holders and a bank overdraft to satisfy also. The headings of the different charges appear so varied, that it is somewhat surprising to find expenditure of £450 that cannot find a place, and has to be grouped under “ general.” On the credit side, commission receives useful assistance from the general goods department. In this connection, it is noticed that members receive certain benefit from trading direct with the society, so that the return on their interests in the concern is not limited to dividends. Expenditure has. stood to the gross return in the follow-, ing relations, viz.:—

Of late years, when the gross return has fallen to any extent, the expenditure has fallen in sympathy. It would seem, however, that expenses cannot be further curtailed, and that the society need not look for a period of prosperity unless the gross return can be considerablj' increased on the existing basis. Land and buildings representing £17,292 have slightly risen. The respective values are not stated, or whether the land is freehold or leasehold. The buildings again do not appear to have been subjected to any allowance for depreciation, although they have - become 12 months older. The mortgage of £lO,OOO might fittingly appear as a deduction, for although it may be secured over all the assets, it is chiefly dependent upon the land, and buildings. As a revenue-earn-ing item, the property falls considerably behind the prior year, but that may be due to a larger part of the building, being utilised by the society. Plant and office furniture have received small capital expenditure during the year, so that they are reduced by their 5 per cent, depreciation allowance of £566. while a similar allowance of over 25 per cent, in respect of the motor car leaves that asset at £145.

Sundry debtors remain the most important of the liquid assets. Including bills receivable, they aggregate £11.113, against which a reserve of £4OO appears. The bad debts incurred during the year amount to £67, which ,looks a comparatively moderate total. The strengthening of the reserve for doubtful debts by allotting a further £2OO to it is a step that should commend itself to all concerned. Stocks at £2726 have altered little, the general goods department accounting for the major part, which at £1790 holds all the year’s surplus on that department’s working and something more. The balance of £277 of cash in hand, and certain revenue accrued to the extent of £304 practically complete the assets. Among the items in the latter, commission forms only a part, showing that the great bulk of commission received is in cash.

Apart from the mortgage of £lO.OOO. the chief creditors ar e the bank and the sundries group. The guarantee account of the former at £4OOO is unchanged, while the ovedraft on No. 2 account has risen slightly to J 2878. The increase, however, is nearly compensated by the reduction in sundry creditors to £2OBB. No alteration has taken place in the debentures, which stand at £775. The paid-up capital continues to rise annually, but it does not yet equal the total of mortgage, debentures, and bank overdraft, consequently shareholders, as such, do not possess as large an interest in the business as the creditors. This condition of things is likely to remain as the greater part of the share capital is now paid up, and, with the addition of the amount uncalled, is not sufficient to cover the funds held in sundry debtors and stocks alone.

June Paid-up Deben - General Net mvi30 Capital tures Heserres Profit dend £ . £ £ P.c. ♦ 1919 P,790 800 12,485 1920 4,523 1,000 — 339 — 1921 6,197 1,000 —• 824 — 1922 7,504 1,000 717 —- 1923 8,419 1,000 —— 641 —— 1924 9,303 850 — 116 —- 1925 9,860 850 —- 367 1926 10,424 850 1,093 1,078 1927 10,866 800 870 320 1928 11,382 800 756 664 5 1929 11,869 775 150 424 1930 12,218 775 117 167 —

Expenditure Gross Return Ratio *1918-19 4,157 3,590 115.79 1919-20 4,557 5,064 89.99 1920-21 6,121 6,945 88.14 1921-22 6,566 7,283 90.16 1922-23 6,683 7,304 91.22 1923-24 6,836 6,952 9S.33 1924-25 7,047 7,414 95.05 1925-26 7,510 8,588 87.45 1926-27 6,847 7,167 95.54 1927-28 7.696 8,360 92.06 1928-29 7,808 8,232 94.85 1929-30 7,386 7.552 97.80 ♦ Ten months' ’ period.