WRIGHT, STEPHENSON

Wanganui Chronicle, Volume 76, Issue 116, 19 May 1933, Page 9

WRIGHT, STEPHENSON

EFFECT OF LOW PRICES. Accounts of Wright, Stephenson, and Company, Limited, for the year ended March 31, disclose a credit balance to !profit and loss of £57,525, including £27,166 brought forward, interim preference dividend, paid on October 5, absorbs £6246, leaving £51,279. Provision for bad and doubtful debts and for unpaid interest on farmers’ advance accounts requires £98,224 and the position has been met by a transfer from reserve of £46,945. No provision for ordinary dividend, which in the previous year was 4 per cent., or for a final dividend on preference shares is made. The directors also report that “The cumulative effect of the continued fall for four successive seasons in the price level of farm products has resulted in a continually increasing number of farmers failing to meet their interest and other obligations. The price level of New Zealand farm products has now reached the lowest level on the farm in the history of New Zealand. Since the commencement of the slump the directors have made large provisions for farmers’ accounts out of trading profits. The continued price fall has so reduced trading profits and commission earnings during the last year that trading profits were not sufficient to meet the position.” The directors state that during the past year the volume of farm products handled by the company was one of the largest in the history of the business. By volume is meant the total bulk, not the total value. They continue: “Our stock sheet inventories, which consist mainly of farm products, arc, as usual, taken at market value or cost, whichever is the lower. They stand in our balance-sheet at the lowest average price level of this century. Any rise in the price level will, therefore, increase the value of our stocks.” Following is a comparison of the company’s results over the last three years:—

The balance-sheet shows paid capital unchanged at £550,082 and debenture stock £425 higher at £689,965. Reserve at £28,133 shows a reduction of £74,111. Creditors and bills payable are £31,537 lower at £772,243 and the amount owing to bankers has been reduced by £66,777 to £107,314. Total assets are £190,880 lower at £2,147,737. Stocks at £97,385 are reduced by £41,774 and debtors and bills receivable arc £143,151 lower at £1,435,046.

1931. 1932. 1933. £ £ £ Brought frwd. 38,366 27,141 27,166 Net profits .. 20,512 25,776 67,865* From reserve — — 46,945 £58,878 £52,917 £6,246 Dividend— Pref., 5| p.c. 13,741 13,741 6,246f Ordinary . .. 6 4 — Amount .. .. 17,996 12,010 — £27,141 £27,166 ♦Loss. f2$ p.c.