N.Z. BREWERIES.

Star (Christchurch), Volume LXVI, Issue 20360, 18 July 1934, Page 9

N.Z. BREWERIES.

NET PROFIT, £76,820 FOR YEAR.

Drastic Economies. CHAIRMANS SPEECH AT ANNUAL MEETING. (Special to the “ Star.") WELLINGTON, July 18. A net profit for the year of £76,820, or £402 less than the previous year’s profit, was announced in the address of the chairman of directors, Dr P. F. M’Evedy, delivered at the eleventh annual meeting this afternoon of shareholders of New Zealand Breweries, Ltd. The payment of a further dividend of 3i per cent, making a total of 7 per cent for the year, was recommended by the directors. “ Shareholders are aware,” said the chairman. “ that the general economic conditions in past year has had a serious effect on the company’s affairs, and the directors have had to record a progressive downward trend in output and earnings. The year just closed has again been one of continued anxiety, but on this occasion there was a slight increase in output. In addition to the extraordinarily heavv rate of the beer duty, the company has experienced a full year of the sales tax and despite drastic economies which the directors put into effect, the year’s results show a decrease on all previous years.

“ In their efforts to meet the general situation and the heavy burden of direct and indirect taxation placed on industry, the directors have in recent years withheld committing the company to many items of normal expenditure. This policy, however, cannot be pursued indefinitely. The report of the Tariff Commission and the ievised tariff lately placed before Parliament do not suggest or provide for anv taxation relief for our industry, although the report acknowledges, with respect to other industries, that what are purely revenue duties may be set at too high a rate from the revenueproducing point of view. We maintain such is the case with regard to the beer duty and that, in addition, the existing high rate of excise is inequitable and hinders industry from functioning on an economic basis. Gross Profit £551,034.

“ The accounts for the year show that after making the necessary provision for depreciation of buildings, plant and machinery, providing sufficient reserve for taxation and other contingencies, and meeting all charges incidental to the management of the company, there is a gross profit of £551,034. From this amount £474,213, being the amount paid to the New Zealand Government for beer duty, has to be deducted, leaving a net profit of £76,820 for the year, or £lO2 less than the previous year’s profit. To the net profit has to be added £12,773 brought in from last year’s accounts, making a total of £89,594.

“ Out of this amount an interim dividend of 3i per cent was paid in December last, taking £38,229 0s 4d, and leaving available a balance of £51,365 Is 5d to be dealt with. The directors now recommend that there should be paid a further dividend at the rate of 3& per cent on the share capital of the company, making 7 per cent for the year. There will then remain a balance of £13,135, which it is proposed to carry to the new account. The year’s results do not permit any addition to the general reserve account, which will remain at £115,000.”

The chairman emphasised that the profits shown, which enabled the directors to recommend a dividend rate of 7 per cent for the year, were not wholly earned from manufacturing and sales, but to a considerable extent had been provided by earnings and investments. The value of land and buildings had been reduced by £47,247, which in addition to the usual annual depreciation, includes a special reserve against that asset created in former years, and now specifically applied. The value of machinery and plant and rolling stock had been reduced on account of depreciation to an extent usual with assets of that nature. Investments and trade advances with the related item of shares in subsidiary companies, totalled £586,493, or £10,944 less than in the previous year. The reduction was chiefly the result of a careful review of investments, and advances were made necessary by present-day conditions. Cash balances stood at £77,884, which were about the normal amount in view of the usual barley and hop purchases. Turning to the liabilities side, paidup capital remained at the same figure, while mortgage and debenture stock had been finally" paid off. Sundry trade creditors amounted to £60,770, and £65,000 was held as reserve for taxation. Over a period, an insurance reserve of £35,000 had been accumulated to meet contingencies which might arise in connection with brewery properties.

Tribute to Late Chairman. The chairman referred to the loss the company had suffered in the death of Sir Alfred Bankart, to whose efforts j must be given a great measure of I credit for bringing about the amalga- ’ niation of various interests resulting in the formation of the companv. lie had been chairman from the date of incorporation until his death. Throughout his term of office Sir All red had up- . plied himself diligently to the tasks of co-ordinating the diverse sections of! the business and of consolidating the

company’s position generally. lie left the organisation well founded and equipped and an enduring example of his ability, industry and foresight. The vacancy on the directorate was filled by the appointment of Mr Henry C. M’Coy, of Auckland. Since the close of the financial year, Mr Robert M. Greenslade, of Dunedin. who also was one of the original directors of the company, resigned for health reasons. the vacancy being filled by the appointment of Mr Hugh Adam, of Dunedin.