NEWTON KING, LTD

Taranaki Daily News, 1 August 1932, Page 11

NEWTON KING, LTD

COMPANY’S ANNUAL MEETING DIFFICULT PERIOD REVIEWED. CONFIDENCE IN MANAGEMENT, The annual general meeting of shareholders of Newton King Ltd. was held nt New Plymouth on Saturday afternoon, Mr. Trnby King, chairman of directors, presiding. “I do not intend to traverse at length the adverse conditions under which we have been, and still are, labouring,” said the chairman, in moving the adoption of the annual report and balance sheet (already published). “All the main factors contributing to the present state of affairs are perfectly well-known to you, and have been reviewed and explained on many occasions during the last eighteen months at company meetings and also by the Press. Sufficient is it to say that a detailed review of the world 1 conditions which have prevailed during the past two years would make a gloomy picture, and it must be recognised by all thoughtful people that we are passing through nothing more nor less than an economic revolution. “On the other hand, we must admit that tremendous efforts are l now Being made by all the leading nations to cope with the situation. In the last six months we have, seen signs of an improvement, which wo hope may turn into a definite development in the near future. The .position in Great Britain has improved immensely since'September last. Immediately upon the advent of the - National Goveiiiment, momentous happenings began to take place. Britain went off the gold standard; abaxidohed her policy of a century—free trade—and protective tariffs were imposed; unemployment decreased; the Budget was balanced by Herculean efforts, crushing taxation being imposed and paid and' tremendous sacrifices cheerfully borne by all classes for , the good of the nation. The. Bajik -of Eng-land-rate is now ddwn td 2 per cent., the lowest for approximately forty years, and now we. have the spectacle of the hugp 5 per cent, loan, comprising £2,000,000,000, being successfully converted ih'to a 34 per cent, issue. NEW SPIRIT OF CONFIDENCE. “These ai 4 e all factors, bift' the greatest is the new spirit of confidence which is animating the communities comprising the British commonwealth of nations, and also the reviewed confidence with . which the foreign nations are? regarding ■ the financial stability of Britain and her capacity .to overcome her present troubles, and, indeed, to give a,, lead to the .world in the path of financial reconstruction. ■ “Nationally, and internationally, we have important, conferences, those which are- now being held, ,and those which are. to be held in the near future. I refer to.the Lausanne Conference on reparations and war debts, the Ottawa Conference now in session, the economic conference to be held later in London, and theI*disarmament 1 *disarmament conference. All these conferences are an indication, of the great efforts which are being made to straighten out the international tangle. I only mention these points because they have a bearing on our futureand, by reason of the efforts which are being made to free the avenues of trade and "commerce between nations and rid the European countries of the incubus of war debts and reparations, one may reasonably expect that some measure of success will be achieved, as consequence of which we are justified. in thinking that things must surely improve .in the near future. THE COMPANY’S AFFAIRS; “Dealing now with the compaxiy s affairs,. I have to point out that the vear just closed has seen further, substantial recessions in values for practically all livestock and primary products and, consequently, the difficulties of conducting the business have been intensified. This is reflected in the balance sheet now presented, and you will see that we have Considered it necessary to make further heavy provision fox’ doubtful interest and ascertained and possible losses on book debts to meet the reduced values. The provision on debtors’ accounts has been arrived at after having viewed all accounts in the light of existing conditions, and ail endeavour has been made as. far iis possible to put down our securities On the basis of valuesi.cxisting to-day. “With regard to stock values, livestock has been taken in at as near as possible to ruling market prices, which are only a fraction of the prices in vogue three years ago. It may be argued that to-day’s prices are just as abnormally low as the others were higli. If this is so, however, the company should reap the benefit when things improve. “As I have indicated in the directors report accompanying the balance sheet,” continued Mr. King, “whilst we are not yet able accurately to' assess the ultimate effect on the company of the drastic collapse in values, yet we have made an honest endeavour to make as

full provision as we consider the present circumstances warrant. The future depends on the nearness of an improvement or the further duration of ruling conditions.

“The directors consider that the trading results of the company for the year now under review were as good as could bo reasonably expected in the circumstances. The accounts show that, after charging all working expenses' and making full provision for depreciation, upkeep and repairs, there was a small trading profit of £1582 0s Bd.'

“In view of the shrinkage in turnover which the conditions prevailing during the past two years of necessity imposed, and also the reduction in commission earnings, solely due to the tremendous fall in values, we consider that the company is fortunate that the’ reduced income was sufficient to cover the overhead charges of running the business. As intimated to you in my last report, this result • was made possible only by a drastic curtailment of expenses. “The year ended April 30 last has shown a further very substantial reduction on the expenses side of the business, and this was in addition to the substantial savings made in the previous •yean” The chairman pointed out that further small reductions might bo made during the current year and, as a matter of fact, were being made all the time, but there was a point beyond which, for the good of the business, further reductions could not be made without running the grave danger of seriously impairing the organisation of years. “Our greatest relief must now como from an improvement in the markets and a rise in the price level for our products,” ho continuted, “so that the business of the farming community may be again placed on a reasonably profitable basis. . BALANCE SHEET ANALYSED. “Dealing now with our balance sheet, and turning firstly to the liabilities of the company, an analysis will show that the total liabilities of the business, outside of the shareholders’ capital, amount to £310,655 this year compared with £340,676 last year, a decrease for the year of £30,021. This decrease is made up as follows: Decrease in mortgages £l5OO, in liability to the Bank of New Zealand £10,886, in bills payable' and sundry creditors £Bl-17 and in liability to the estate of the late Newton King £9485.

“This has been brought about largely by the reduction of £19,616 in the .stock on hand, a reduction of £5919 in properties and plant, and the balance/is a reduction in our book debts apart from reservations for losses and doubtful interest.

“I think you will agree with me that what movement tfiere has been in the balance sheet figures has been in .the right direction, particularly the reduction in the company’s liabilities of £30,021 'in the year and the reduction of £19,616 in stock on hand. This latter reduction has btjen brought about by the strict curtailment of purchases and a strenuous effort to liquidate aS large a portion of our stocks as could be done under existing conditions. When times improve, it is .confidently exf pected that further progress in this direction will be achieved, and, as this becomes possible, a further reduction of the company’s liabilities will ensue and, consequently, further relief will he afforded the company in interest charges. “The year has again been a very strenuous one for the whole of the staff, but I am pleased to say that, through their efforts in loyally supporting the board and management and endeavouring. to give the best possible service to our customers, the company lias . received during the year its full measure of support from the farming community of Taranaki,” said Mr. King in conclusion. “This applies to both our merchandise and stock departments.

“Taking into account the lower range of values ruling, the turnover of our farmers’ general merchandise departments has been well maintained. Our thanks are due to our many customers and good friends throughout Taranaki who have supported the company with their business during the year. As 1 have stated above,' our policy has been to merit their confidence, even in the face of difficult times, by giving the very best of service and continuing our traditional policy of endeavouring to be in the forefront and giving /the best possible value for money spent. I wish once again to express our sincere thanks to all the members of the staff, who have given of their best, worked hard and shouldered the worries of the year to the utmost of their ability. I am more than satisfied that the company has..a staff second to none of any of the institutions operating in this district.” EXPRESSION OF CONFIDENCE. .After the report and balance sheet had been seconded by Mr. W. C. Weston, a brief discussion ensued, during which the general manager, Mr. S. E. Shaw, stressed the point that the directors were fully alive to the conditions ruling and their effect upon the values of land and stock, and that he could give his assurance that the members entrusted with the handling of the credit side of the business were taking a conservative view of values in the light of their experience of the past two years. With regard to reductions and economies which had been effected in salaries, wages and running expenses of the business, Mr. Shaw stated that the reductions had applied from top to bottom of the staff. In fact, the senior members of the business had been called upon to shoulder proportionately a far bigger reduction than the lower paid officials.

The report and balance sheet were adopted. The retiring directors, Messrs. J. H. Ashton, W. Healy, T. King, J. H. P. Strang and A. Thorne, were elected for a further term of office. On the motion of Mr. W. C. Weston, seconded by Mr. F. Amoore, Mesrs. W. E. Best and Wilkinson, Christchurch, were re-elected auditors for the ensuing year. Before the termination of the meeting, Mr. J. McLeod said he felt that lie was voicing the opinion of all those present when he stated that he wished to move a vote of confidence and appreciation to the directors and executives for the manner in which they had

handled the problems of the business during the year just passed, and the way in which they were standing up to the difficulties which were confronting them during an extremely difficult period in the country's history.