Mh's Million
p. 10 · Read in the full issue
Great Fiji Trading Co. Increases Its Profits And Its Problems
THE 1947 balance-sheet of Morris Hedstrom Ltd., leading trade organ isation of the Central South Pacific, carries on the remarkable record of pro fits and accumulated savings, commenced in 1942.
When World War II came, and Europe could no longer buy copra, the company’s profits fell—from £85.097 in 1938. to £55,306 in 1941. Then Japan came in, paralysed the great copra-making in dustries of Philippines and Indonesia, and brought the South Pacific’s copra into urgent demand.
While the company generally shows plenty of enterprise—its competitors say, bitterly, that it seldom misses a pass— its management is cautious and con servative, insisting that the profits of this good time be used for the under pinning of the whole financial structure, to guard against possible bad times. Thus:
One effect of it all is the accumulation of no less than £1.032.000 in ‘‘invest ments and cash.”
The life-time benevolent habits of Sir Maynard Hedstrom and his associates show up strongly in the lists of gifts in the accounts over the past ten years: £ Given to staff fund 35.000 Given to Fiji patriotic funds .. 19,710 Given to University Scholarship Fund for Fijians 25,000 THE main worry of MH directors probably is the profitable em ployment of their huge accumu lation of cash. Their shareholders, over the years, have been trained to expect anything from 8 to 15 per cent. But about £1,000.000 of the company’s capital and accumulated re serves is now in cash, earning nothing, or in gilt-edged, averaging at a guess, less than 4 per cent. Put in another wav: this company could return all of its sub scribed capital (£739,613), and still make a profit of £lOO,OOO per annum.
If Fiji could be thrown wide open to new European settlement and industries, the MH policv would be obvious use these huge surplus funds to finance sound new enterprise, and double the profits. But Fiji now, it seems, is to be a close preserve for Fijians and Indians.
Fijians have little developmental enter prise, and the average Indian is not a sound investment. Hence the furrows of care on the MH forehead. There is little in Fiji in which to employ a million pounds of savings; yet, if they are shifted out of Fiji, the money at once is at the mercy of Socialistic Governments with quaint, startling ideas about “capitalists.”
Year Profit Total Reserves 1942 61,770 300,873 1S‘43 94.769 480,351 1944 99,088 628.246 1945 94.678 652.731 1946 94,210 698.600 1947 103.548 711.956
1940 1947 £ £ Paid capital (Fijian i (Fijian) 739.613 739.613 Deposits 4.946 3,897 Creditors, etc Land, buildings, plant. 18.999 117,540 etc. .. 303,195 192,241 Plantations 49.247 16.954 Stocks, etc 337,110 260.261 Investments and cash . 167,256 1.032.095 Capital value branches 90,465 75,176 Book debts, etc 136.244 171,122