N.Z. CO-OP. DAIRY CO. HAS HAD GOOD YEAR.

Star (Christchurch), Issue 19154, 21 August 1930, Page 4

N.Z. CO-OP. DAIRY CO. HAS HAD GOOD YEAR.

BIG FIGURES A FEATURE OF LAST BALANCE-SHEET. .(Special to the “Star.”) AUCKLAND, August 20. i Big figures are a leading feature of the eleventh balance-sheet issued by the directors of the New Zealand Co* operative Dairy Company, which enjoys the distinction of being the most 1 substantial enterprise directly concerned with primary production in this or any other country. Tf only because of its great volume, this huge undertaking. with its headquarters in the Waikato, is a remarkable tribute to the courage of its founders. The total turnover is considerably over £(5.000,000 per annum. At the last annual meet* mg the managing director, Mr Wm. Goc.dfellow, quoted the figures at £6,602.646. During the year ended May 31, .sales of butter alone totalled £4,368,142, and, in addition, there were the outputs of seventeen cheese and three milk powder factories. Most of this huge bulk of dairy merchandise has been shipped to the Old Country, but large quantities have also been delivered to other destinations. Early in the season fairly substantial contracts were made for deliveries to Canada, and, in view-of the subsequent slump in the world's markets, this must have proved particularly good business, ensuring a reasonable price for a portion of the output, and at the same time easing the strain on the congested London market. Sales were also made to such far distant countries as China, Siam and Turkey. The marketing arrangements are in the hands of Amalgamated Dairies, which sells the produce on a 2> per cent consignment commission basis, with provision for a rebate to the companies utilising its services. Formerly this rebate was on a 50-50 basis, but last year the terms were altered so that companies were to receive as their share two-thirds of any profits. In its business with the United Kingdom the consignment policy* which the “ (:o-op.’s ” directors have always favoured, is still followed. This means that the butter takes its chance of the market when it arrives in London. For the season just closed that portion of the company’s turnover dealt with on a f.o.b. basis has produced the best results. Falling markets have favoured vendors throughout, and dairy produce buyers at the j consuming end have made heavy losses. Viewed purely as an ordinary bal-ance-sheet the latest does not look quite as well as its immediate predecessor, inasmuch as the bank overdraft is higher by £91,000, and £97,000 more is due to sundry creditors. On the other hand, £30.000 worth of debentures have been wiped off the slate.

there is £63,911 less due to suppliers and £11,648 less to depositors. The bank indebtedness is small compared with its dimensions in 1927, when the company, through its bankers, was called upon to assist suppliers over a difficult period. To a lesser extent the same movement is again apparent, for on the assets side stocks are up £71.000, and sundry creditors £70,000. Investments are higher by £9OOO. A troublesome item, “ milk powder preliminary expenses,” has been reduced , by £5500, and, like its former companion, “milk powder development account,” is well on the way to extinc-j tion. Reserves have been added to by £7OOO. The fixed assets, namely, property and plant, are valued at £1,117,100, and virtually represent the shareholders’ capital. Additions valued at £40,176 have been made dur ing the year, and £52,462 has been written off for depreciation. It is a ! matter of common knowledge that the company's buildings and plant arc always kept in first-class condition. : The scope of operations of the Glen Afton Collieries is indicated by the item “ sales ex mine and profits from, depots,” £116,781. This subsidiary is likely to bulk still more largely in the turnover after the new year, as arrangements have been made to lease from the Government the neighbouring ; M’Donald coal mine, and considerable additional business is involved in the ■ new contracts entered into. The company has £50,000 invested in the Challenge Phosphate Company, which not only pays interest on this investment, but also makes special rebates to the company. An additional feature of the company's methods in financing suppliers has been its utilisation of the Government rural intermediate credit scheme. At the present time it has given guarantees of up to £120,000 in connection with loans obtained from the Rural Credit Association. With so much money going out of the country for the purchase from foreign countries of casings for dairy products, it is interesting to note the activities of the company’s box department. Last year the deliveries of timber totalled 7,204,000 superficial feet, the containers manufactured comprised 1,270,482 butter boxes, 93,579 cheese crates, 88.951 milk powder cases and 92,400 sundry cases, and the whole of this was New Zealand white pine purchased chiefly in the King Country and the Taupo-Rotorua districts. A section of the company’s business that has frequently provoked considerable adverse criticism has been that devoted to milk powder. According to Mr GoodJ'ellow, this is to-day its most popular feature. Suppliers to the milk powder factories received, in addition to the usual butter-fat price, a premium of ltd per lb, a cartage premium of .83Gd per lb, plus a bonus from profits. In addition to these attractive returns profits have been sufficient to pay off more than two-thirds of the capital expenditure on the milk pow*