REDUCED BY ½D

Poverty Bay Herald, Volume LXIII, Issue 19122, 17 September 1936, Page 6

REDUCED BY ½D

KIA ORA DAIRY BONUS RES LET OF PRICE DROP UNSOLD LONDON STOCKS The Kin Ora Co-operative Dairy Company, Limited, has found if necessary to reduce its bonus payment by Ad per lb butterfnt. as a result of the recent rapid fall in values in London.

The directors, in the annual report, recommended a final payment ol 2ct per lb next week, and this would have brought the average for the season to 13.11 d per lb Imlterfat-. However, unsold stocks in London now are worth only 108 s per e.wt, or 6s per ewt below the balance sheet valuation, and ill ease the market does not- recover the company is preparing to pay a, bonus of only lid. hut will pav out the. additional id later if the price received for the unsold butter warrants this action.

Shareholders were given the news atthe annual meeting of the company today by the chairman of directors, Air. AI. Dovle.

Air. Doyle said that up to the present, the company had had splendid results, following its poliev ol consignment, spreading sales over the period up to the arrival of the next shipment. This was found to be very beneficial as regards the pay-out. The directors wore sorry that they ®ad to back-pedal, but they were wise not to pay out more, than they received. and hoped ultimately to pay out the additional id. or at least most of it. CABLES FROM AGENTS The balance sheet,, he added, was made out in .July, and since then from 6000 to 7000 boxes of butter had been sold at prices ranging from 114 s to 1235. “The balance sheet,” lie- said, “has been ready for final completion since July. It was held over in order that the directors could obtain the. latest information regarding the value of butter for mid-September arrivals, as the company had two shipments due to arrive then. On AugnslNji we cabled our agents, and asked for an authoritative opinion of the market for mid-September, and received the following reply: ‘Difficult forecast, hut statistical position indicates present price of 1?(D will he 4s higher in niid,Sept ember,’ “We then closed oiir books, ’ Air. Doyle continued, “(alSsg the unsold stocks in at 114 s. which left us with a substantial margin. However. the | market broke about a week later, and is now quoted at 108 s. Alter receiving advice of the fall in values, we again cabled our agents regarding the future trend of the market, and received this reply, dated September 13: ‘Future market depends largely on extent United States of America purchases. Government, there stales dumping duties will he levied. This has curtailed buying, and in conjunction with forced selling by r.i.f. speculators here responsible for recent fall. Market firmer to-day, and expect some improvenieni .* “PLAYING SAFE” “In view of that,” the chairman proceeded, “the. directors have, amended the additional payment to lJ,d, and issued a statement that if tkp market does not recede further, the remaining surplus will be paid out at a later -date. The ljd will be paid out on September 20. This Bd payment will bring our average for the season up to 12.61 d, which is better than three-quarters of the factories in New Zealand, and if we can still pay out the extra, j>d, as we still hope to do, it will he the highest in New Zealand.” Replying to Air. dribble, Air. Doyle said that the company could very nearly pay the lull 2d recommended, if the market remained at the present, level, hut. to he sale the, directors, had decided to red nee the amount by jd per lb. Air. dribble said that none of the suppliers knew when they arrived at (he meeting of the 25 per cent cut in the bonus, and they might have been in--1 formed through the press before the jmeeting. Many suppliers had committed themselves on a 2d bonus, and the 25 per cent cut, would' ho a serious matter. Air. Doyle replied that, the. directors were playing safe in retaining the Id bonus. TUpo directors were reasonable men. amf were doing 1 heir best tor their suppliers. (Applause). Air. H. R. Hull said that lie, was disappointed with the reduction in the bonus, hut was confident that- the directors were adopting a wise course by making sure that the money was in hand before paying it out. If the company paid out more than it, received, the- reclamation would not lie home by .some of last season’s suppliers who were no longer supplying the company. In reply to a question, the- secretary. Mr. J. .11. Sunderland, said that 400 foils of butter remained unsold. With the market at 108 s, the company had £4500 in reserve, but the company did not, know what the market price would be when the last of the butter, arriving in London 10-morrow. was sold. Had°tlabutter market risen as predicted, the company would have been able to pay out a, bonus of 2JM, instead of the I 'M that would he paid next week. There was no further reference to the matter.