BEST YEAR FOR S.F.C.A.

Southland Times, Issue 24237, 21 September 1940, Page 3

BEST YEAR FOR S.F.C.A.

ANNUAL MEETING OF SHAREHOLDERS. NET PROFIT OF £20,125 “The year has been the most successful in the history of the association,” stated the annual report of the directors presented at the annual meeting of the Southland Farmers’ Co-operative Association Ltd. yesterday. The chairman of directors (the Hon. Adam Hamilton) presided. The report was read by Mr Hugh Smith. “Not only has the business been successful from a financial point of view, but the directors have every reason to feel that it has also given good service to clients,” continued the report. “There is no doubt that the association is now firmly established as a sound and serviceable business in our province. “The net profit for the year is shown in the profit and loss account at £20,125/6/11. This net result, from a gross profit of £43,694/5/11, reflects" great credit on the management, and goes to show that the gross earnings of the company are not overloaded with either head office or staff expenses. The net earnings are more than 46 per cent, of the gross earnings. Not many businesses will show a better result. “Since our last annual meeting the Empire has experienced many severe shocks as the result of the war. It is now left to the British Empire to fight the battle of freedom and to preserve our Christian civilization. New Zealand is playing her part, and whatever grouse we may have, let us drop it in the meantime, and put every ounce of energy and management in helpingeach in his own sphere—to work and fight for victory. Britain is giving us I good prices for our produce, and, what j is more, she is providing the shipping and keeping the seas clear, and is paying cash for all we produce. No effort or sacrifice of ours can compare with Britain’s. RISING COSTS “I know that farmers are concerned with the ever-rising costs, and with the possibility of having to face lower prices after the war, when they will have to suffer a very unfavourable comparison with other workers. I feel sure, however, that the farming community, and especially that of Southland, will continue to produce the goods in spite of any difficulties they may be experiencing. Let us win the war first and settle our difficulties afterwards, or all is lost.” The total assets stood at the same figure as last year, £242,000, stated the report. Land and buildings were 'up by £l2OO. This was because of part payment of the new store being built. In this connection the association was fortunate in concluding an agreement to purchase a small right-of-way and four small slum cottages. At present an addition to the wool stores was being built on this property and would have the valuable effect of joining the present two portions together. Stocks of merchandise were up by £6BOO. Of that amount £5649 was brought out of stock reserves on last year’s balance-sheet. This became necessary to meet the requirements of the Income Tax Department. “The. item of sundry debtors is £35,000 less than for the previous year. This is a very healthy sign and shows that clients are more able to meet their ? obligations,” says the report. There is in credit in the Bank of New Zealand the sum of £26,593. This is another welcome change. Last year’s balancesheet showed a bank overdraft of £30,158. It is hoped during this year to adjust in consultation with the shareholders concerned the amount of £5421, being calls in arrears. Sundry creditors are up by £lB,OOO. This again reflects the sound position of clients, but is a factor that needs watching.

INCOME TAX RESERVE “The income tax reserve is £12,138. Having to set aside more than £12,000 for income tax out of a net income of £20,125 is indeed a heavy imposition. While the war is on and the Government needs the money, perhaps we had better not complain, especially if the Government spends the money wisely. “In the appropriation account there are only two items of interest. The first is the item of £625, being payment of dividend arrears. This payment completes a dividend payment on deposit preference and pre-preference shares for the final period in which no dividend was paid during the depression. The other is the balance of £8545. This practically doubles from £4368 last year the amount of visible reserves, which substantially improves the balancesheet.

“The position in general is therefore very satisfactory and the directors look forward with confident anticipation for the results of the coming year.” The report and balance-sheet were adopted. The fact that the net earnings were more than 46 per cent, of the gross earnings must be considered very satisfactory, said Mr Hamilton. It showed that the company was being managed inexpensively. He thought that few companies would be able to show such a good result. The gradual building up of the company had also been accompanied by the redeeming of back payments.

The following dividend payments were approved:—Dividend, on deposit preference shares at the rate of 5 3-5 per cent, per annum for the half year (£2100); payment of arrears of dividend of deposit preference shares (£625); dividend on preference shares at 5 per cent. (£716); dividend on ordinary shares at 5 per cent. (£751). Messrs A. R. Dawson, James A. Woods, E. A. Cameron and D. Teviotdale were re-elected directors.

The auditors, Reid and Jones, were re-elected.

The loyal support given by the shareholders was emphasized by Mr Hugh Smith and a vote of thanks was carried. In moving a vote of thanks to the directors, the manager (Mr M. J. Royds) and the staff, Mr A. S. McNaught referred to the successful way in which the directors had handled the business "of the association. Every courtesy, he l .id, had been extended to the clients and shareholders. The motion was carried unanimously.

LONDON BUSINESS RESTRICTED SATISFACTORY TONE ON STOCK EXCHANGE

(Received September 20, 6.30 p.m.) LONDON, September 19. Business on the Stock Exchange has been very restricted, but the general tendency for leading stocks is considered to be satisfactory. ’’