INCREASE IN PROFIT

Wanganui Chronicle, Volume 80, Issue 248, 19 October 1937, Page 11

INCREASE IN PROFIT

N.Z. GUARANTEE CORPORATION, LTD. ADVANCES HIGHER. The directors of the New Zealand Guarantee Corporation, Limited, in iheir report for the 12 months ended August 31, 1937, state that during the year business has been good, the total of the advances for the period being higher than in the previous year. The net profit for the year, after providing for income tax and making full provision for losses on *■ doubtful securities, amounts to £10,675 Os 7d. While this represents at first sight only a slight increase in the figures for last year, the profit earned is actually much greater. The provision for income tax this year amounts to £6643 2s 6d, an increase of £2671 10s over the amount of £3971 12s 6d payable in the previous year. This is accounted for by the fact that last year's accounts included a considerable item of profit that was not taxable, i.e., dividends from companies which had already paid income tax. This item was a non-recurring one and consequently in this year’s accounts the whole profit is taxable at the maximum rate of 7s 6d in the £l. In addition it should be noted that the extra capital subscribed has been available for only about 4i months in the financial year just ended and the earnings from such extra capital are naturally comparatively small. The full earning power of the increased capital should have its effect in the next accounts presented to shareholders. The number of shares in the new issue subscribed for by shareholders amounts to 227,892 out of the 240,000 offered. Certain shareholders neglected to exercise their rights in regard to the new issue. In the meantime the directors propose to hold over the question of the issue of the remaining 12,108 shares. An interim dividend at the rate of IM per share on ordinary shares was paid for the half-year ended February 28 last, this accounting for the sum of £3OOO 3s Id, and the directors now recommend the payment of a dividend of 2d per share. This will absorb £5899 2s, and the balance to be carried forward will amount to £64360 Is 4d, as under:—

Balance in profit and loss account, August 31, 1936, £8660 14s lOd; less final dividend to August 31, 1936, £4000; add profit for year ended August 31, 1937, £10,675 Os 7d; making available £15,335 15s sd; less interim dividend to February 28, 1937, £3OOO 3s Id; dividend now recommenced, £5899 2s; balance carr’ed forward, £6436 10s 4d. Three retiring directors, Messrs Will Appleton and W. Thorpe and Sir Ihomas Wilford, offer themselves for re-election.

The dividend for the year is un£93"” ed ’ Net profit last year ‘ was