THE FARMERS’ CO-OP AUCTIONEERING CO. LIMITED

Waikato Times, Volume 90, Issue 14024, 29 March 1919, Page 4

THE FARMERS’ CO-OP AUCTIONEERING CO. LIMITED

The annual meeting of the shareholders of the Farmers’ Co-operative Auctioneering Co. was held in the Oddfellows’ Hall, Hamilton, this morning. Mr. J. Barugh, chairman of directors, presided over a large attendance.

In moving the adoption of tli o report and balance-sheet, the chairman said: — “It gives me great pleasure to again have the privilege of meeting shareholders and congratulating them on the completion of another very satisfactory year’s trading, and on the substantial position of the company as borne out by the balance-sheet and report concerning which we have met here to-day. This result has been achieved despite the serious disabilities consequent upon the war, and the influenza epidemic with which we have had to contend. Close of the War. “ Before dealing with matters appertaining to the report and balancesheet I feel that it is incumbent up an me to make reference to the war which was raging furiously at the time of our last annual general meeting, and was brought to a termination ■in November when the enemy signed an armisitce, the conditions of which were tantamount to an unaonditional surrender. This was the inevitable conclusion, and we can unreservedly rejoice that our nation has emerged from the fiery and frightful ordeal with even greater prestige than it before enjoyed. Britain is deservedly held in high repute because of the sacrifices so cheerfully made by Britons the world over in vindication of their high national ideals of liberty, justice, and humanity. It is not too much to say that never before has the British nation enjoyed the implicit confidence of the peoples of the world in such a measure as it now does, and that confidence will stand us in good stead during the period of reconstruction. The fact cannot be" ignored that we are faced with many complex and intricate problems—problems that will tax the sagacity of statesmen and the utmost determination of our pqople; but the characteristics which have stood by us during the war will prove efficacious in peace, and I confidently predict that our great Empire will feel the aftermath of war to a less extent than any other country. The Epidemic. “-Coincident with the termination of hostilities, our district, in common with the rest of the Dominion, passed through a trying time owing to the prevalence of influenza in a severe form, by which many lives were lost, while others were incapacitated f n r lengthy periods. With so large a staff as ours it was only natural that our business should be considerably disorganised, but, thanks to the loyalty of the members, this was not so severe as it might have been, as the few who did not contract the malady worked to their utmost to keep the flag flying, and those who were affected resumed their duties at the earliest possible moment. In conjunction with the other firms in the district, sales were suspended for nearly three weeks, and this, of course, affected business generally and to no small extent affected our turnover. On November 26th, 1918, during the height of the epidemic, the company sustained a great loss by the death of Mr. W. J. McNicol, and the suddenness of his death came as a great shock to all whose privilege it was to. know him. On the 16th November he was strong and active, and full of life, and within ten days ins spirit had passed to the Great Beyond. He was a most hardworking,, energetic man—his loyalty to the company was absolute. His upbringing, the number of years lie had passed in his profession and his natural intelligence had made him an expert in his work. Tiie trust and affection with which he inspired all who knew him made him a most valuable servant of the company, and we shat feel his loss for many years to come. Finance. “ Capital Account. —As will lie seen from the report there were 342 allotments of .ordinary shares, representing 2616 shares of £5 each and at a premium of 5s per share. There were also 13,447 “A ” preference shares sold at par to 56 applicants at £1 each paid up, and 1300 “ 1! ” preference shares sold at par to six applicants at £1 each paid. These allotments, plus calls paid, added £19,4.15 to our working funds and £8123 to the uncalled capital reserve. All premiums on shares sold wore added lo the reserve account as usual. As you arc all aware authority was taken on the Hth of January last to increase the capital of the company to £750,000 by the creation of 50,000 additional ordinary shares of £5 each, and by the creation of 200,000 “ B ” preference shares of £1 each. The ordinary shares are now. being offered at a premium of 5s per share, with a minimum allotment of five shares, and farmers have the option of paying op to either £1 or £2 per share, but at j present payment in full will not be accepted, as it is the desire of j your directors to build up the un- j called capital. The total subscribed \ capital at the 31st January was £293,- ; 155, of which £19,694 was uncalled. The total paid-up capital was £272,942 15s, and there wore 51,629 ordinary and 198,700 “B ” preference shares still unallotted. “ I would like to remark here upon what I consider the very disproportionate average shareholding when the needs of the business are considered, especially in connection will, the ordinary shares. Quito a large number of our older shareholders, I regret to say, hold only one or two shares each, and I would earnestly urge upon these shareholders to take an early opportunity to substantially increase their respective capital interests in the company Those wild only one or two shares could, I venture lo say, easily bring thorn up !•'> at least six or seven by for another five shares at a first cos’, o'. £6 ss. The company stands to protect farmers’ interests in general, and those of its shareholders in particular. It lias stood the test of time under adverse conditions, and besides paying a consistently good rate o> dividend and liberal rebates (which in the avaronrale amount to no less c sum than £195.931), it has undoubtedly from its inception performed a valuable service to ttic farmers and people, generally of the Waikato ; and surounding districts. -

Annual Meeting of Shareholders

The Chairman’s Address

“ Reserve Account.—This stands at £47,652 10s plus reserve created for equalisation of dividends, namely £3,882 8s lid, making our total reserves £51,534 18s lid, which is equal to a premium of £1 6s lOd per share on the ordinary share capita! issued to date, and more than justifies the premium- imposed. “ Mortgages.—The amount in the balance-sheet, viz., £21,224 8s Id, shows an increase of £12,739 12s lid. This is mainly attributable to the mortgage on the Auckland property and existing mortgages on land acquired by the company during the year.

“ Deposits.—Shareholders’ deposits with the company amount to £64,361 16s lOd, an increase on the previous year’s figures of £14,363 Is lOd. The whole of this liability is fixed with the company for varying periods, willi maturing dates equally- spread.

“ Shareholders’ Current Accounts and Sundry Creditors. —The amount at credit of shareholders’ current accounts as shown is £40,106 17s 6d, and £79,524 18s 4d appears in the balance-sheet at the credit of sundry creditors’ accounts. These amounts arc somewhat larger than usual and represent proceeds credited to accounts for stock sales, for which payment had not become due on 31st January, balances at credit of open accounts, also sundry purchases of general merchandise, a large proportion of which came to hand during the month of January, importations being undependable owing to war conditions.

“ Contingent Liabilities. These comprise uncalled amounts due on shares, in The Farmers’ Co-op. Wholesale Federation (N.Z.) Ltd. and Waikato Shipping Co. Ltd. Bills under discount show as nil. " Total Liabilities. —Before dealing with the assets I would like to point out that our total liabilities as they stood at 31st January amounted to £230,80G, whilst the assets (excluding uncalled capital) amounted to £588,037, which means that our liabilities arc covered by assets more than tw’o and’ one half times and show a percentage of liabilities to assets of only 39.21 per cent., which manifests a wonderfully sound position. The above figures also show that the assets are sufficient to pay all liabilities, all capital paid up by shareholders and then leave a sum of £84,888 as a surplus equalling 31.1 per cent, on the paid-up capital. Assets. “ Properties.—The value of our properties is shown in the balancesheet as £81,297 15s 8d (a sum much below the Government valuations). The increase in this item during the year, viz., £31,626 10s Id is mainly due to the purchase of a valuable site in St. George’s Bay road, Auckland, upon which wool and bulk stores arc now being erected; to buildings at Hamilton, To Puke, and Te Kuiti; to the purchase of land at Morrinsville, Taumarunui, Te Awamulu, The Mount, Tauranga, Mercury Bay, Coromandel, and Ngongolaha. On the tliroe last named sites we have erected saleyards. All maintenance expenses with regard to our properties are paid out of current earnings and I nnght further remark that all our property values have been written down from time to time. “ Machinery and Working Plant.— The sum of £4318 Is covers the whole of the working plant and machinery engaged in the business, and the inventory at 31st January shows that this amount is amply covered by actual values.

“ Sundry Debtors and Bills Receivable. —Total, £414,332 4s lid. The increase on these figures as compared wdii last year is consistent with 'die steady growth of the business and the peculiar conditions that prevailed from October to the end of our financial year, the epidemic, backward season, and fall in prices of stock, making it necosary for farmers to lean more upon the company for financial assistance than is usual during the above-mentioned months. Tins item comprises many thousands of accounts and includes advances to farmers against slock. It also Includes debit balance? of all those operating on the company’s finances through their current accounts, and debit balances for goods, etc., suplied, as well as outstanding amounts due for stock purchased/.and when the dimensions of our business and the prevailing condition-; are taken into account, the amouri! outstanding is not out of proportion. I need hardly assure you that every care is exercised in making advances, and in tiro watching of accounts.

“ War Loan and Investments.—-As disclosed by the balance-sheet our investments total £22,180 15s 6d, and of lids sum £IB,OOO is invested with the Government. This figures out 43 per cent, of our total reserves, and is invested outside of tire business. “ Stocks of General Merchandise. — The stocks of merchandise were valued at £66,508 (an increase of £31,416 on last year’s stocks). This to some extent is attributable to the company increasing its range of goods at Hamilton and branches and is well in proportion to the volume of business done. The lack of shipping up to the lime of the cessation of hostilities was severely felt, but we availed ourselves of every opportunity for securing supplies in order that our shareholders’ needs could he filled; and although arrivals could not be depended on I am pleased lo say that generally speaking very little inconvenience was experienced. The.whole of our stocks have ybeen thoroughly checked by competent experts, the amount shown being well within present market values.

“ profit and Loss Account. —This statement I do not think needs further explanation from me. The net nrolit for the year amounts to £33,353 Os ltd. Your directors have already paid interest at the rate of 6 per cent, per annum on preference share capital and propose lo pay a dividend at tiie rate of 8 per cent, per annum on ordinary share capital, and to carry the balance forward. “ Rebates an 1 Allowances. —During tiie currency of the year rebates and allowances to the amount of £17.521 9s 6d have been paid out or crcdite 1 to shareholders’ accounts, and this sum in no way forms part of, nor is it included in our net profit.

“ Year’s Balance.—As disclosed by the balance-sheet the amount carried forward last year was employed to meet the income and war lax levied on that year’s profit, and the balance, viz., £1552 18s 7d has been added lo the reserve account for equalisation of dividends.

“ Turnover. —The turnover for the year amounted to no less a sum than ; £2,149,432. “ Percentage of Expenses.—The percentage of expenses to gross profits taking rebates into account equals 56.47 per cent, (which again compares more than favourably with other co-operative companies doing business in New Zealand.) “ Percentage of Expenses to Turnover.—The percentage of expenses to turnover figures out at 3 per cent., which, I venture to say, is lower than any other co-operative business in the Auckland province, and as low as any co-operative business throughout the Dominion. “ Percentage of Net Profits • to Turnover.—The percentage of net profits to turnover is 1.55 per cent., which is equivalent to 31s for every £IOO turned over, and this mostly goes back to farmer shareholders by way of dividend. This goes to prove that the company is a truly co-opera-tive one, that its policy is not to make huge profits on its turnover, but is based solely in the interests of the farmers. Branches. “ The various sets of earnfngs, items of expenditure, and percentages to which I have just alluded, represent the aggregate results of the entire business—Hamilton and its several branches—and it is gratifying to me to be able to assure shareholders that each branch has contributed a satisfactory quota to the general earnings and the various managers and staff deserve our best thanks for achieving such results, especially under such trying circumstances as have been experienced during the past year. Saleyards. “ Prom the printed map now in possesion of shareholders it will be seen what a large territory the company operates over, viz., approximately 14,000 square miles, and spread over this area we have 33 sale yards.

Taxation. “ The taxation of the last few years has resulted in an excessive drain upon the company’s profits. I need hardly say that we have paid this very willingly, seeing the object for which it was needed., I think the shareholders are to be congratulated that they have been able to give so much practical help to the Empire to-,wards-bringing the war to a successful conclusion, but when you remember that 7s 6d - has been deducted from every £1 of our net profits and the unavoidable but heavy increase in our expenses, you will realise that your directors have passed many anxious days. It will be some years before taxation is materially reduced and wages, which form the greater part of our expenses, will never revert to the pre-war standard. It is fhercfore certain that we cannot afford to further reduce our_ commisions. “ Stock and Auction Departments. “ Although we have had a satisfactory year with our stock sales, the cattle markets have been most unreliable—particularly for cattle two years old and under. This I think can safely be accounted for by the fact that since the war started development work lias gradually been diminishing until now practically very little virgin country has been brought in, owing to the high cost of fencing materials and seeds, and the difficulty of getting labour. Previously this country was an outlet for our surplus slock; hut this outlet has practically closed for the time being, with the I result that young cattle have not been so eagerly sought after. We have been slightly relieved by a few hundred that have been sent south, but nothing to any apreciable extent. Prices are now very low and there is little competition. However, any one now stocking up for the winter should be able to show a very satisfactory margin when they come to sell in the spring. This is more than could be said for the last two or three years. The sheep market right through the year lias been particularly steady. Pedigree Cattle Sales. “ While on the question of stock I would like to make reference to our pedigree stock sale, which is usually held early in October. This sale was started at the request of a number of breeders who promised to give It their whole support, which they have done. In order to make it the success that it should lie, wo must have the wholehearted suport of the breeders, and they must strive to yard such slock as will attract buyers from beyond our own district. I noticed at the meeting of the Jersey Association at Cambridge exception was taken to other than pedigree stock being yarded at this sale. This is quite right. If anything else lias been yarded it lias been an oversight, and will ho closely watched in future. Frozen Meat. “ During the Inst month the shipping difficulty has become more aggravated. This to no small extent is > due to the unequal distribution of refrigerated tonnage between Australia and New Zealand, and unless early relief is given, the position will become acute, particularly in the South Island, where some works have already had to close. From what I can gather, however, very little relief can be expected until early May, but even at this late hour I hope that the Premier will he able to bring some pressure !o hear on the Comptroller of Shipping arid he successful in getting some of the insulated tonnage diverted from Australia to New Zealand, and thus ease what may be termed a very serious position. Dairy Produce. “ The outlook for the dairy farmers in New Zealand is particularly bright

at the present time. Heavy shipments of both butter and cheese have recently been made, with the result that on February 28th, 1919, there were 227,951 boxes of butter and 490,438 crates of cheese in cold store in New Zealand as compared with 369,148 boxes of butter and 350,268 crates of cheese on February 28th, 1918.

“It is the opinion of experts that owing to the world shortage of milk products, shipping difficulties are not likely to cause the industry further anxiety. The exportable surplus of* both butter and cheese for the seasons 1918-1919 and 1919-1920 has been sold to the Imperial Government at the folowing prices:—Butter, 181/per cwt. and cheese at 10? d per ib. f.o.b. New Zealand main ports. This sale will no doubt establish confidence m financial and trade circles, and will result in payment to suppliers of from Is 8d to Is 9d per lb butter-fat for butter and Is Id to 2s per lb butterfat for cheese. The butter situation warrants the belief that butter may be as good if not a better proposition than cheese for several years after 1920.

“ Much has been said about milk powder and glaxo. In addition to milk powder manufactured by the New Zealand Dairy Association at Matangi and Matamata, a further factory is now being erected for the Waikato Co-op. Dairy Company at Waharoa, and in the near future other factories will be established by the Cambridge and Thames Valley Cooperative Dairy Companies at Hautapu and Waitoa. The present milk famine in Europe has created an unprecedented demand for dried and condensed milk. To-day’s London quotations will return the producer of dried milk 3s 6d per lb butter-fat, but it would be obviously unwise for the dairy farmers to expect this handsome return to continue for long, and he would be well advised to estimate his returns for the next few years on a much more conservative basis.

Woe}. “ The uniform arrangement of a fixed basis of values under which this important product has been dealt with during the past three seasons has, I venture to say, given every satisfaction to the majority of wool producers, and has enabled the British Government to have complete control of our wool for military and other purposes. Such a result could not have been attained had such wools been submited to competition of aU comers, and secondly owing to limited v shipping space available, prices in all probability would not have been so satisfactory, as buyers would have been chary to operate with the absolute certainty of having to arrange storage accommodation for from six to twelve months. I am pleased to be able to say that the congestion of the various wool stores has been considerably relieved during the last six weeks, as quite a number of steamers have loaded on an average of 16,000 to 17,000 bales apiece, and this has made a big hole in wool accumulations, and has made the prospect for general cargo space much brighter. For the coining season we shall be in a position to deal with our own clients’ wool at first hand, as within the course of the next month or so our Auckland bulk, wool, hide and skins store will be completed. It will be up-to-date in every particular, will be placed in charge of a thorough expert and farmers will be well advised to entrust their own company with their consignments. We intend to establish receiving depots at our variI ous branches for oddments of wool and small consignments of skins and hides, and thus hope to save fanners the bother of consigning and a certain amount in transit charges, as by forwarding in bulk we shall be able to take advantage of the minimum railage rates. Merchandise. “ During the early part of the year we found merchandise goods almost impossible to indent from Home, and whatever lines were arriving the costs were particularly high; our indents, therefore, had to bo curtailed as much as possible, as we could see the demand for certain lines would only arise where farmers were practically forced to order their urgent requirements. Manures. “These are still selling at hijh rates, and probably will continue to do so for some months yet, but as soon as shipping is again normal and freights lower, prices will decrease accordingly. It is certain, however, that it will be a long time before prices arc again at pre-war rates, as labour costs alone will always remain high. “ Basic Slag.—This may be obtainable again shortly, although shipment from Home is prohibited at the present lime. Negotiations, however, are going on with the Home Government through Mr. Massey, and I hope at no distant date permission will lie granted for export. “ Superphosphate.—The position in regard to superphosphate has been unsatisfactory throughout the year, as owing to the shipping trouble in Australia and the epidemic, shipments could not be relied on, and in some instances accumulations covering a period of three months arrived in one vessel and at an “ off time,’’ when demand was small, and importers had to face the position and sell in some cases under cost rather Ilian increase expenses by taking il into store. ft / Grain. " “ New Zealand will he well supplied with oats this year, as estimates prove that there will ho a good surplus over requirements, therefore, prices will ho much lower than last year unless an export demand arises. The qualify of the oats also will be holler Ilian the previous year.

Seeds. “ Grass seed, clovers and turnips were selling ab very high prices during the year, hut the present outlook points to a smaller autumn sowing, owing to the small number of bush burns; therefore, lower prices must reign very shortly, as merchants will not run the risk of carrying over highpriced seeds to the spring. This particular line has now worked into a' large business with us, and we are supported well by our shareholders. We have always been most particular to secure seeds of the very best quality, and having gained the conlldence of our clients we intend to hold it by continuing to supply one standard, and One standard only, which is [ “ best grade.” ; Machinery. Machinery such as farm implements, I engines, separators and shearing I plants arc still at high money, freights again being the main factor in this re-

spect. Farm Implements. “ When we first started our merchandise departments we also acted as agents for Massey Harris Go., Ltd., and have built up a large business for farm implements. During the past year we secured the agency of P. and D. Duncan’s implements for the Auckland and Waikato districts, and with these two particular agencies we hold o valuable asset, and they may be described as second to none in New Zealand. Wc have recently secured the sole agency for the utility benzine 2i h.p. engine. This engine, which is being manufactured by tiic well-known firm of Price and Sons at Thames, is fitted with all the latest improvements, and this should at c«ce appeal favourably to our numerous clients. Motor Cars. “We have been, fortunate enough to secure through the Federation the sole agency for our district of Hupmobile cars, which we believe wiL prove to be a valuable agency, as the cars arc well and favourably known throughout the Dominion, and we have every confidence that they will give entire satisfaction to buyers. Wire, This is one of the few lines that farmers can look forward to obtaining in the near future at a reasonable figure as prices arc now on the down grade and better shipping facilities will considerably case the position. Much the same remarks apply to corrugated iron. A falling off in business certainly arose during the year in these particular lines, but farmers were wise only to purchase their actual urgent requirements. Jute Goods. “ We have to look to India for the entire supply of our jute goods, and the shipping service from that country has been considerably curtailed during the war period. At one time the arrival of woolpacks and cornsacks could almost be figured to a day, now it is nothing unusual to receive them months later than anticipated, and we have had considerable difficulty to contend with to find adequate stocks to supply early requirements. Present indications are that there will he ample supplies for the coming season’s demands, and I think we can confidently look forward to lower prices. Ecnzine and Kerosene. “ There are large stocks of these now in New Zealand, therefore no fear of any shortage. Prices are still high, but reductions should come about in the near future. Employees on Active Service. “ At present we still have 13 employees on active service, but at no distant date we h pe to he able to rejoice with them on their return to this fair land of ours. During the year £I2GG Gs 3d lias been paid out by way of half-pay allotments, and from the commencement of the war to the 31st January last no less a sum than £4393 18s 9d had been paid out by way of allotments. Lana Speculatlen. “ I feel it my duty to sound a warning to farmers against rushing into the purchase of farms at high prices, without adequate capital, trusting, in many instances, to obtain advances for the purchase of stock far in excess of what their capital warrants. In my qpinion money is likely to' be lighter, and therefore farmers may have to contend with restricted, rather than increased accommodation, especially where farms have been purchased at high values. We cannot lie blind to the fact that during tiic past few years, owing to the speculative demand for land, prices have jumped considerably, and it is doubtful whether these high prices can be justified. Conclusion. In conclusion, gentlemen, I have to thank you for your attendance here to-day and hope that next year we shall be able to hold our meeting in our new buildings in Victoria street. It gives me great pleasure to record the fact that the company still enjoys the confidence and advice of the *• Farmers’ Union,” and I hope we shall be even more closely associated and thus he enabled to absorb the ideas and ideals of each other. “ I have now much pleasure in moving the adoption of the report and balance-sheet.”