The BP Empire

First Consolidated Accounts

Assets Of SOM. In The BP Empire

'he big Australian company, ns Philp & Cos. Ltd., through foments, trading, planting and \ping activities, has a substantial >e in the economy of every South \fic Islands Colony and Territory, n New Guinea eastwards to wa, inclusive. The disclosure of j assets and general structure on lust 8, made in compliance with tralia’s new Companies Act, was \interest to the South Pacific trolly.

ITHERTO, only the balance-sheet [of the parent company (now 80 rs old) had been published. That 1961 showed an issued capital of K)0,000, plus funds accumulated rarious reserves, and in P/L ac nt, of about £14,000,000 —or funds, very fully pro ed by substantial assets, of over [OOO,OOO. The parent company Uly showed a profit of from 0,000 to £BOO,OOO (in the year er review, to March 31, 1962, it [ £987,266); and it has consis ly paid 10 per cent, on its sub bed capital, or £600,000 per um. lecause it obviously had a great lety of assets, which inevitably e benefiting over the past 17 rs from galloping inflation; and ause the huge organisation was died cautiously and conservatively an experienced board, so that the ual accounts have disclosed no re than was required by law, the sent condition and passible future BPs have stirred some financial imentators to a kind of frenzy, [ have kept the take-over wolves Dng today’s big-time speculators tinuously on the prowl, consequently, the consolidated Imce-sheet required by the new stralian law has been eagerly jited. Its publication on August fas an interesting event. It shows i the Burns Philp empire is even ger and stronger than had been posed. Its notable features: I Within the structure are no less n 54 subsidiary companies—30 istered in Australia, 14 in Papua I New Guinea, 3 in Fiji, 5 in New (land, 1 in New Hebrides, and 1 United States. Those of interest Pacific Islands are listed on page

(Continued on p. 147)

• The assets are shown thus:

of which no less than £26,690,809 are shown as “shareholders’ funds”. • But that total of £35,864,746 is not the end of it. An explanatory note says that £13,194,174 is the “book value” of what one critic calls the “prodigious shares portfolio” of BPs (and which is spread over a very wide range of leading stocks and shares); and that the “market value” of the investments is £22,700,000 —that is £9,000,000 more than “book value”, or cost. Some commentators say that the true value of the Burns Philp empire is not less than £50,000,000. • Because of unprofitable opera tions in the shipping sections, the value of the shipping assets, which cost £3,676,461, has been written down to only £50,000. The BP fleet of seven vessels, no matter how they are suffering under present-day con ditions. must be worth a lot more than £50,000. • The consolidated P/L Account shows that income from—

Deducted from that were over head costs totalling £1,511,813 (depreciation on fixed assets, £427,386; provision for tax, £573,511; tonnage replacement, £250,000; property replacement, £125,000; pro vision for long service leave, £100,500, etc.) leaving, with certain adjustments, a net profit of £1,119,278.

The notable thing is that the in come from investments about £BBB,OO0 —which would mostly be tax-free, is far more than sufficient to pay the usual 10 per cent, dividend on issued capital of £6 millions. The company now proposes to increase issued capital to £7,200,000, by a special issue (paid for out of re serves) of 1 for 5; but if this brings the dividend liability up to £720,000,

the income from investments still can take care of it, even if the group makes no profit at all out of trading.

Little wonder that the take-over wolves, from several countries, have been prowling around Bridge Street in recent years!

But the board, while emphasising the difficulties arising from (a) the burdens on Australian-owned ship ping; (b) unpredictable political situations in South Pacific countries; and (c) ceaseless inflationary pro cesses, shows every intention of carrying on. The board, incidentally, now comprises James Burns (chair man, and son of the founder); Joseph Mitchell, veteran general manager; P. T. W. Black, a senior executive; J. D. O. Burns, a senior executive, and grandson of the founder; F. E. Loxton, who has been associated with the company for over 60 years; and N. D. Pixley, who has had a lifetime association with P & O interests.

Political and economic theorists sometimes rave against the big, powerful companies which operate freely in our midst, in the name of private enterprise. But in these days of growing alarums and un certainties it may be comforting to those who direct South Pacific affairs to remember that they have as fellow-dwellers in the Islands a few corporations mainly Australian who have a huge stake there, and— like BP’s who now cautiously dis close assets of over £35 millions— the resources wherewith to defend

and sustain their interests.

Rwr.

Subsidiaries

Of the 54 registered Companies

listed as subsidiaries of Burns Philp

& Co. Ltd. the following are con

cerned with activities in the Islands:

Australia

Fanning Island Plantations Ltd.

Kulon Plantations Ltd.; New Britain Corporation Ltd.; New Britain Plantations Ltd.; New Guinea Plantations Ltd.; New Hanover Plantations Ltd.; New Ireland Plantations Ltd.

Pattons Slipways Pty. Ltd.; Robinson River Plantations Ltd.

Fiji

Burns, Philp (South Sea) Co. Ltd.; Corrie & Co. Ltd.; Narain Furniture Co.

Ltd.

New Hebrides

Burns, Philp (New Hebrides) Ltd.

Papua-New Guinea

Burns, Philp (New Guinea) Ltd.: BNG Trading Co. Ltd.; Hotel Moresby Ltd.; Samarai Hotel Ltd.; Local Laundries Ltd.; Port Moresby Freezing Co. Ltd.; Moresby Hire Services Ltd.

Papua Hotel Ltd.; Kulon Plantations Ltd.; New Britain Plantations Ltd.; New Guinea Plantations Ltd.; New Hanover Plantations Ltd.; New Ireland Planations Ltd.; Robinson River Plantations Ltd.

Usa

Burns, Philp Co. of San Francisco.

£ Fixed (freeholds and leaseholds, ships, plant and equipment) 7,695,009 Shares in subsidiaries . . . . 823,418 Investments 13,194,174 Current (cash, sundry debts, stocks, shipping consignments, branch balances, etc.) 14,078,194 Goodwill 74,221 Total assets of Group . . . 35,864,746

£ Profit on trading 1,853,150 Income from investments 887,930 Profit from sales of assets . 6,855 gave gross of 2,747,935