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Wanganui Chronicle, 13 December 1949, Page 6

KEIM KlBBElt LOSS | A net loss of £lB,OBl was incurred by Reid ' (New Zealand) Rubber Mills Ltd. in the year i ended September 30. For the second year in . | succession no ordinary dividend is recomI mended, the last payment being 6 per cent. Jn 1947. 1 The year’s loss compares with the profit of £5954 last year, when the result was the low- ' est for nine years. ' A surplus of £5567 from the depreciation I reserve and excess tax of £143 have been transferred to the profit and loss appropriation account. Against this is debited brokerage I costs of £lOl2 incurred in connection with the I preference share issue and the year’s loss of j £lB,OBl. I The dividend of 5 per cent, on preference j shares absorbs £9132 and the carry forward lis reduced by £19,515 to £22.998. Gross profit jun trading declined from £77,931 to £45,463, | and administration expenses increased from ; £62,117 to £62,294. The directors report that turnover fell off 'in the early months of the year, but showed a marked improvement in later months. Fur- . ther wage increases, coupled with the general rise in costs, greatly added to expenses, and the company erperienced great difficulty, as , well as delay, in securing Price Tribunal ap- , proval for increased selling prices. Increases had heen granted, but not on a scale to compensate fully for the extra costs, and in most instances the variations were approved too late : for any appreciable benefit to be felt in the ; past year’s accounts. i As these conditions coincided with the run-ning-in period for the tyre factory, satisfactory results were impossible to attain and an over-all loss was sustained. Shortage of labour provided a difficulty in both the tyre factory and the general factory. In the process of getting the tyre factory into running order, there were substantial outgoings which could not be treated either as part of cost of the plant or as production expenses. Jl'hese were segregated and appeared in the balance-sheet under “tyre factory establishment expenses,’’ representing a temporary capitalisation of preliminary costs to be written off as soon as possible.