A SUCCESSFUL COMPANY

Taranaki Daily News, 14 December 1926, Page 15

A SUCCESSFUL COMPANY

RESULT OF PRUDENT MANAGEMENT (From Our Own Correspondent.) Wellington, Dec. 10. The Gear Meat Preserving and Freezing Co., of N.Z. is about the oldest freezing company in the North Island, and it is no twaggeration to cay it is the most successful of all the freezing companies in New Zealand, proprietary or co-operative, because it has always been well managed. The management has been prudent and far-seeing, and the aim throughout has apparently been to build up reserves rather than to dissipate profits in dividends. The financial year of the Gear Company closed on November 30, and six days later the balance-sheet was circulated, which indicates the clock-like precision of the company’s operations. And what a remarkably fine balance-sheet it is! It is outstanding when placed in comparison with the balance-sheets of freezing companies that have been recently issued. The profits on sales and manufactures and transfer fees totalled £80,772, which contrasts with £87,844 in the previous .year, a shrinkage of £7072. This is a trifling contraction, and is no doubt partly, if not largely, due to the smaller volume of the investments. The expenses and charges totalled £16,198, equal to about 20 per cent, of the income, and compares with £12,106, the expenses in the previous year. The net profit amounts to £64,574, against £75,738. The amount brought forward from the previous year is £20,399, which, added to the net profits, gives an available balance of £84,973, against £96,649. Out of the available balance £5OOO is added to the general reserve fund, and £5OOO to the insurance reserve, bringing the former up to £20,000 and the insurance reserve to £55,737. The appropriation for taxation is £14,500, against £16,000 last year, and the dividend is Is 9d per share, which is the same as was paid last year, absorbs £40,250. In addition to this dividend the shareholders receive a bonus of 3d per share from the insurance fund, so that dividend and bonus together equal 2s per share, or 10 per cent. The liabilities and assets afford food for reflection. Out of liabilities totalling £674,340, a sum of £73,828 is due to sundry creditors; the rest represents shareholders’ funds, of which £460,000 is paid-up capital. The assets are more remarkable. The freehold properties, plant, etc., are valued at £58,000, and it is safe to say that the head office building with its retail shop in Lambton Quay is worth this money. The Gear Company’s properties and plant and equipment, if worth a penny, must be worth half a million sterling, but the prudent and far-seeing directors have steadily written down the works, which now constitute an excellent secret reserve. Sundry debtors and deposits account for £358,275, and it is probable that the larger portion of this amount consists of deposits. The company has invested £194,916; (this was over £600,000 two years ago, but there was a distribution made to shareholders which reduced the amount considerably). The balance at credit at the bank is £23,951, and cash in hand £659. It is a good clean, wholesome balancesheet, and shows what can be accomplished by sound business management. The Clear Company is a strong concern, and because it is strong it becomes the butt of the envious and unthinking. We seem to dislike strong institutions, quite forgetful of the fact that only strong concerns are of any value in times of stress.