MACDUFFS LIMITED

Wanganui Chronicle, Volume 83, Issue 55, 7 March 1939, Page 11

MACDUFFS LIMITED

LOSS ON FIRST YEAR'S TRADING. “This, the first year of the present company, has proved a year of great difficulties, culminating in the appointment of a receiver,” states the first annual report of Macduffs Ltd., for the period from December 11, 1937, to December 31, 1938, which will be presented to shareholders at the annual meeting in Wellington on March 10. The amalgamation of the previous company with Shillings Ltd., took place on December 11, 1937. The Shillings organisation comprised a chain of eight stores, all recently opened and hardly established, and catered for the drapery and soft goods trade. The Macduffs organisation comprised the main and established Cuba Street shop in Wellington, a store in Christchurch, and a group of five smaller stores in. Lower Hutt and North Island country towns, all supplying a variety of merchandise, but mainly known for crockery and kitchenware lines. The fusion of these two organisations and the consequent adjustments of stock, staff and stores involved considerable expense and many losses which had not been forseen. Certain of the stocks carried by Shillings Ltd. were cleared at unprofitable prices and in some instances substantial loss. In Wellington and Christchurch there were duplicate stores not greatly distant from each other. A serious fire in Christchurch adversely affected business in that city. Further, the name' of Macduffs was introduced for the first time in many of the towns. Following the appointment of the receiver on November 1, 1938, meetings of shareholders and creditors were held. Arising out of the first, the board of directors was reconstructed with Mr. Charles Todd as chairman, Messrs. W. J. Candy and J. S. Land (original directors), and Messrs. W. Appleton and T. N. Gibbs (now directors). The creditors at their meeting indicated a unanimous desire to assist the company over the crisis in its affairs and readily gave a six months’ moratorium. From the appointment of the receiver on November 1, 1938, to the balance date on December 31, 1938 (two months), the actual bank overdraft was reduced by £65,671. The accounts submitted indicated a loss of £34.384 5s 4d, taking full account of all known posses and of all allowable depreciation. The directors have taken steps for efficient internal reorganisation, including the closing of duplicate and redundant stores, and feel confident the business can trade profitably and that satisfactory results should accrue for the future. For the purpose of meeting financial obligations it is proposed to form a separate company to be known as “Macduffs Properties Ltd.” This new company to purchase the properties owned by the company in Wellington, Lower Hutt and Palmerston North and lease same back to Macduffs Ltd. The other shops arc all held on leases. Because many shareholders are resident out of Wellington a full account of the chairman’s address and proceedings of the annual meeting will be sent later to shareholders. The balance-sheet as at December 31, 1938, is as follows: Liabilities: Authorised capital, 150,000 6 per cent, cumulative orefercnce shares of £1 each, £150,000; 350,000 ordinary shares of £1 each, £350,000. Issued capital: 144,004 6 per cent, cumulative preference shares of |£l each fully paid up, £144,004; 251,170 ordinary shares of £1 each fullypaid up, £215,170. Shareholders’ fund, £359,174; National Bank of New Zealand Ltd. demand account, £133,126 Is lOd and interest accrued £134,201 15s lOd, less receiver’s account, £41,746 15s, £92,455 0s lOd. Deferred creditors, £60,367 7s 6d; receiver’s trade creditors, £14,293 8s 7d; reserve for land tax, £1750 4s sd. Total, £528,040 Is 4d. The company’s liability under its leases has been excluded from the foregoing balance-sheet. Assets: Freehold and leasehold land and buildings, Cuba Street (at cost less depreciation), £90,296 16s lOd; freehold land and buildings, Palmerston North, £25,058 15s 8d; Lower Hutt, £BBBl 13s 2d (at cost less depreciation), £124,237 5s Bd. Fixtures, fittings, plant and cash registers (at cost less depreciation), £77,155 15s 7d. Cost of acquiring and alterations and improvements to leasehold premises (at cost less depreciation). £28,582 17s ) 8d; stocks on hand, £149,995 8s 3d; cash on hand, £2097; sundry debtors, and prepayments, £4947 2s 6d. New Zealand Centennial Exhibition Co. Ltd., 300 £1 shares paid to 15s at cost. £255; patents and trade marks, at cost, £5O 9s 6d; preliminary expenses and brokerage, £9102 5s lOd; goodwill at cost, £97,262 11s; profit and loss appropriation account, £34,384 5s 4d. Total, £528,040 Is 4d. Net loss £34,384 5s 4d after deductions.