UNSETTLED MARKETS

Poverty Bay Herald, Volume LII, Issue 16202, 27 November 1926, Page 5

UNSETTLED MARKETS

EFFECT ON INDUSTRY FARMERS’ LOYALTY ESSENTIAL A CHAIRMAN’S WARNING Reviewing the conditions which have affected the freezing industry during the past couple of years, Mr. J, \V. Nolan, chairman of the Gisborne Sheepf nrmers ’ Frozen Meat and Mercantile Co., Ltd., to-day addressed a strongly-worded warning to the shareholders of the company, gathered for the annual meeting. Complete and wholehearted loyalitv of the shareholders alone could ensure the successful use of their investment o* .nearly half a million pounds, lie said. The finances of the company had shown some improvement, but not as great an improvement as should have been the case. “In moving the adoption of the report and balance-sheet, 1 have much pleasure in congratulating the shareholders on the result of the year’s operations,” remarked Mr. Nolan. “The year passed has indeed been a very trying one, not only to our company, but to the district as a whole. The unprecenented dry season which we have passed through having had a very serious effect on the turnover in both the freezing and mercantile sides of our business. This, however, is only one ol’ the causes of the general business depression; the low prices of stock, wool, and general pastoral products, arising from the unsettled state of the markets, have been severely felt by the producers, with the resultant effect on business undertakings. Yet, notwithstanding all these causes of general depression, I ant pleased to be able to say we have inside considerable progress. “A comparison of your present bal-ance-sheet with that for the previous year will, I think, satisfy you as to this. Progress, however small, is always more or less a matter for congratulation, and after looking at some balance-sheets for the past seasons of similar concerns to ours, I suppose wc should congratulate ourselves on having made such progress as we have; but personally, I feel that with complete loyalitv from our shareholders, the result would and could have been considerably improved.

IMPROVED FINANCES

“The company commenced the. financial year with a bank overdraft of £131,143. This, at the end of the year, stood at £100,305, a reduction of £21,855. During the year £14,000 was outlaid in eapital expenditure, £2713 has been written off the cost of floating debentures and amalgamation expenses (thereby completely wiping out the latter item), and £10,404 has been expended in repairs, maintenance and renewals. Our open accounts have been reduced by the sum of £14,250, and £IO,OOO of this reduction has been utilised to increase our secured accounts by that sum. There has also been a decrease in expenses during the year of some £2200. Last year depreciation wa3 not deducted from the earnings for that period, but was carried forward to the profit and loss appropriation account. This year the procedure has been reversed, thus accounting for the reduced profit shown in this year’s balance-sheet. X think, perhaps, I might draw your at-v-tention to the large writings-off the cost price of our fixed assets, some ,% £126,600, as an evidence of the stabilising and conservative policy adopted your directors. A SUBSTANTIAL DECREASE.

“The killings at the three works show a shortage of some 10,400 earcases as compared with last season, both Tokomaru and Hicks. Bay showing an increase, whilst at Kaiti the shortage was considerable, being some 21,750 carcases less. This decrease in actual carcases killed, however, does not represent so serious a decline in our earnings as does the loss in weight, as compared with the stock treated last season. You must remember that our freezing charges are made on a per pound basis, and when ~ I tell you that the shortage in weight on that comparison was this year some 4,100,0001b5., you will perhaps appreciate the difficulty your directors have had to contend with to show a profit, however small, on the freezing side of our business; for you must also remember that returns do nor Mop at the actual charge for freezing, but are affected bv the byproducts, which in the case of impoverished and lighter-weight, stock show a proportionately smaller return. RE-BUILDIXG SCHEME. “That any profit at all under the circumstances has been made is due to the euttng-down of expenses and cheaper working, attributable almost entirely to the scheme of alterations and additions suggested by our engineer and adopted by your directors some three years back, the carrying out of which has been a heavy drag on our finances,''and of which we are now beginning to feel a partial benefit. It is hoped to complete the entire scheme by the end of next year, when you will have a works that will compare more than favorably with any other similar works in the T)o- ---? minion. Buildings, improvements and ■f ! new erections, however, no matter how good or economical, arc not going to bring you sufficient profits to pay dividends or stabilise your business without more loyal support from our shareholders. A MATTER OF LOYALTY.

“Personally, 1 detest continually harping nu this question Of loyalty,” Mr. Nolan continued, “but I feel that however unpleasant it may be it is necessary. There is an old proverb which says: ‘Constant dripping wears away a stone,’ but I am quite sure it will require something considerably more than constant dripping to get loyalty out-of some of our shareholders. This lack of loyalty has always been a puzzle to me, and in fact leaves a more or less dishonorable taste in one’s mouth. You who are disloyal can, of course, bring about the loss of your own capital or assist in depreciating a dividend if you choose, but does it never strike you that in doing so you are acting dishonorably to vour fellow shareholder who is loyal and with whom, by becoming a shareholder, you undertook to co-operate for the well-being and success of your company. It is so, the sooner you appreciate that position the sooner your fellowshareholders will appreciate you. “One sometimes wonders whether some of you farmers really lyiderstand the position. This is a genuine, farmers’ co-operative society, const: >tuted entirely for the service and protection of farmers. It has established an organisation which comprises freezing works, business premises, wool stores and plant in which nearly half a million of your money is iu-

vested, and vet some of you make no endeavor whatever to conserve thatcapital or to make any return on the money so invested. "Which of von would expect a return, or indeed not to lose money, if ho invested money in a farm and allowed the land to remain idle? That is the position here. If you do not support your own company you must; inevitably lose money. On the other hand, if you loyally support it, you must just as Inevitably make money. Give ns the quantity of stock and we can lower all charges, with a resultant return in the prices you will receive for your produce. “With the complete co-operaton of every shareholder, which we ought to have, we need not fear any opposition and you could not fail to reap the recompense which such co-operation deserves. ’ ’