Burns, Philp And Co.

Net Profit Again Higher

TI/fESSRS. Burns, Philp and Company, Ltd., report a net profit of £216,979 for the year ended March 31. Dividend is un changed at 10 per cent, and requires £150,000. A transfer of £50,000 to re

serve wall increase that item to £1,050,000, and £25,000 is again transferred to special depreciation from the company’s copra plantations. Against £39,089 brought forward, £31,068 is carried forward.

Gross profit was £860,118. showing an increase of £67,277. Expenses of adminis tration (including taxation) increased by |C48,679, and the amount allowed for de preciation, bad debts, and losses was higher by £12,626.

The stock market now values this com pany’s £1 shares at 68/-. The following are extracts from Melbourne Herald’s review of the balance-sheet: “Sixty-three years of trading, marked by sound management, has enabled the

shareholders to participate in a greater measure of prosperity in the last five years, than those holding scrip in many other industrial companies in Australia.

“An example of the soundness of finances was provided in 1933, when the directors decided to write down the com pany’s copra plantations to offset the de cline in the prices of copra. To date £lOO,OOO has been clipped off their value, without showing any signs of discomfort.

“The feature of the past year’s trading was an increase in gross profits by £67,277. Of this amount, however, only £5973 found its way into net earnings.

Expenses were £48,678 higher at £508,518, and depreciation and bad debts took an additional £12,626. In other words, for every £1 increase in gross profits, ex penses and depreciation moved up by 18/3.

“This policy of restricting dividends to 10 per cent, and storing up large sur pluses for the future has been carried to such a point that reserve funds now total 21/6 for every 20/ of capital.

“In addition to its merchandise depart ment, where a substantial increase was recorded in sales, the company benefited from the improved market for copra, and the better trading conditions existing in Papua and the Mandated Territory.

“Associated interests form an import ant contributor to earnings. The com . pany holds two-thirds of the capital of Burns Philp (South Sea) Co. Ltd., from which £25,000 was received in dividends and one-half of the Queensland Insurance Company’s capital, which brought in £30,000; so that these two investments alone provided one-third of shareholders’ dividends.

“In addition to paid capital of £1,500,000, there are reserves totalling £1,616,338 at work, while outside liabilities account for £1,627,311. Apart from cash, £113,508, stock £850,360, and debtors’ accounts for £813,992, the remaining assets, including investments, property, and shipping in terests are grouped together in one item valued at £3,065,818.”

Year ended March 31, 1934. 1935. 1936. £ £ £ Net profits 203,257 211,006 216,979 Div., 10 p.c 150,000 150,000 150,000 To reserve 25,000 25,000 50,000 Special depreciation.

Copra plantations 25,000 25,000 25,000 Carried forward . 28,083 39,089 31,068 Expenses, etc. . . 427,786 459,839 508,518 Depreciation, etc. 104,542 121,995 134,621 Gross profits . . . 735,586 792,841 860,118

Liabilities—

Capital paid up. . 1,500,000 1,500,000 1,500,000 Reserve fund . . . 950,000 975,000 1,000,000 Insurance, reserve etc 516,418 517,775 535,268 Cash credits ... 36,167 144,626 58,256 Bills and foreign drafts 400 180 821 Open liabilities . . 1,474,924 1,528,105 1,568,263

Assets—

Merchandise, copra, advances 707,867 715,427 850,360 Cash in hand . . . 123,046 164,852 113,508 Property, shipping, and shares ... 3,060,818 3,215,210 3,065,818 Sundry debtors . . 739,261 783,285 813,991