Both Increase:

Sales And Expenses

Review By Mh Ltd.

From Our Own Correspondent SUVA. July 2.

ALTHOUGH the .volume of sales has been the highest in the company’s history, in many departments pro fit rates have been very disappointing,” said Sir Maynard Hedstrom, when ad dressing the shareholders, as chairman, at the annual meeting of Morris, Hed strom, Ltd., at Suva, on June 30.

Pointing out that the increase of ap proximately £41,000 in gross trading profit was not a real increase, Sir Maynard said that in earlier years considerable pro vision for stock depreciation was made before the figure was struck.

“An increase of some £50,000 is shown in operating expenses,” he continued. “In almost every way, particularly perhaps in salaries and wages, the cost m running’ the business has seriously Increased. Des pite this increased expenditure on salaries the engagement of recruits ne cessary for the present and future work of the company has been very difficult, and the staff is working below full strength and to a smaller degree of effi ciency than before the war.”

Reviewing production in the territories in which the company operates (Fiji, Tonga and Samoa), Sir Maynard said that prices for raw products, with the ex ception of cocoa, continued buoyant.

“In my last address,” he said, “I stated that the total of Fiji’s exports and im ports for 1947 exceeded by about £4,000,000 the previous record trade year of 1942.

That the prosperity of Fiji has continued to increase in 1948 is indicated by the fact that the total of imports and ex ports increased by a further £2,500,000, the 1948 figure being £13,734,346. . . .

"It is quite generally held that the peak of post-war business prosperity has been reached and probably passed. If this belief is right, the company’s profit figures may be reduced in future years.

“But in the areas served bv the com pany it is proper to remember that a certain buttress against adversity is given by the relatively long-term con tracts made with the British Ministry of Food for the chief exports of the terri tories concerned. The shareholders will also appreciate from the published figures that the company is well placed to take advantage of any trading opportunity that may occur.”

Great Financial Strength

IN the year ended March 31, the com pany made a nett profit of £94,843 about the same as last year—and is distributing its usual dividend of 10 per cent, on ordinary shares. The company, in its business, employs £739,613 of sub scribed capital (£520,407 ordinary and £219,206 preference) and £650,875 of reserves. In addition, it carries over £200,000 in the P/L account—making a total available capital of nearly £2,000,000.

There now is not scope for all this money in the business, with the result that some £260,000 is lying in the banks, and about £360,000 is in government and municipal stocks.

There was great growth and develop ment in the South Pacific during the past half century, in which this well managed company fully participated; but future prospects are less stimulating. The tendency of governments generally is to liscourage European enterprise, which appears to limit the usefulness of the mg trading corporations. The three or four big companies operating in the islands are all financed and equipped to

handle almost any new development; but, until administrative policies change, the opportunities they want are not likely to present themselves. That, in turn, has a tendency to retard development and pro gress.

Pension Fund

THE company’s Pension Fund, which has been in existence 22 years, has assets worth £200,000, nearly all in vested in a wide variety of stocks. Mem bers pay in over £5,000 p.a., and some £lO,OOO p.a. is received from MH Ltd., and pensions now being paid amount to £2,078 p.a.

Pastors H. Strauss and Streicher, of the Lutheran Mission, New Guinea, who have been in Australia since the begin ning of the war, have received permission to return to the Territory.