20 Advts. (Supplement.) THE COMMERCIAL MOTOR February 12, 1043. •
Page 42
If you've noticed an error in this article please click here to report it so we can fix it.
TRANSPORT SERVICES LIMITED
Considerably Improved Results. New Road Haulage Scheme.
Mr. H. C. DRAYTON'S VIEWS.
THE Sixth Annual General Meeting of Transport Services Limited was held on Friday last at Winchester House, Old Broad Street, London, E.C.
Mr. H. C. Drayton, M.Irtst.T., chairman of the company, presided.
The Secretary (Mr. C. John-son,
having read the notice convening the meeting and the report of the auditors, The Chairman said:—Ladies and gentlemen,—When I met yria last I indicated that . out profits for the then current year,' although satisfactory, might yet show a .decrease. In my training I was always taught it was dangerous to prophesy, but certainly when I made that forecast I .thought I was safe. Events have proved me 'wrong, 'and once more it is borne upon me that a prophet is not only a brave man but a foolish one.
The gross profit for the year is £172,300,
• against £161,700. After providing for National Defence Contribution, Excess Profits Tax, and income-tax, and taking .credit for provisions nis longer reqUired, the net amount available to the company is illf3,400, against £30,900 last year. .
• E.P.T. LIABILITY
We have not yet agreed Our basic standard with the Esicess Profits Tax authorities, but we have got sufficiently far in our negotiations to enable us to make a closer estimate of our liability. This has resulted in the, company having to appropriate less for E.P.T. in this year's accounts owing to the conservative estimates made in previous years, SO that the figure of £98.400 is not a true reflex of one year's retainable profits.
It is extremely difficult for me to give you a figure upon which you could rely as our standard basis. In addition, certain allowable deductions are still a matter of negotiation and any guess I make might prove to bb misleading; I can, however, say that our reserves for taxation are conservative.
. From the L98,4Do we have debited iaoicto to reserve for depreciation and obsolescence of buildings. This I may say is over and above the ordinary wear and tear allowed by the Inland Revenue. We have also Out R. sum of £17,700 to, vehicles replacement reserve, and at this point I would like to ' • explain the nature of this item. • VEHICLES REPLACEMENT RESERVE • Certain newspapeth have reported this sum as being "depreciation upon vehicles," whereas the depreciation on our fleet has . already been debited before arriving at the figure of £172,300. This £17,700 arises from the profit on the sale and impresSment of vehicles, and as such, in the opinion of the' board, is of a capital nature. They have, therefore, placed this sum to vehicles replacement reserve as a hedge against possible increased prices of new vehicles we may ha;se to pay after the war. After debiting the Preference capital redemption reserve and adding the carry-forward of Lzs,000 we arc left with'a sum -of Lrom000 available for shareholders..
The directors have declared a, dividend on the Preference and a first interim of 4' per cent, and a sectind interim of 6 per cent, on the Ordinary shares', niaking so per cent., which leaves a balance of £78,600, and'it is proposed that Lz,000 be transferred to stall berievolent fund and L66,000 to general reserve, making thegeneral reserve Liosr,000, and leaving a balance of Ins,690 to be carried forward, against (74,452 last year. This' result is a matter for congratulation, not only to yourselves but to the staff and employees of this company -and the sub
• sidiaries, who, in a year of difficulty, have not Only succeeded in maintaining our profits but have actually increased them, and I should like to convey to them your • appreciation of their efforts (Hear, hear.) ofl2
BALANCE-SHEET ITEMS
You have a balance-sheet in -front of yeI. and there are only two points to which I would draw your attention. One is that the group reserve, including the carry-forward, after the foregoing appropriations, now totals ir42,335, and the other is that we have borrOwed i75,000 froin the bank. Since the date of the report the company has issued a further .i5o,00ts Preference shares at a price of zrs. sd. and £56,000 of 5s. Ordinary shares at par to the Ordinary shareholders, so that to-day the company is in a strong liquid position,
the Previous two years when I have
addressed you I ha.ve given you a table showing the split-up of our gross revenue. To-day, owing to the incidence of tax, igstead of the table showing the present YEar's split-up of gross revenue, I give you an average percentage over the last two years, which is a truer picture of our outgoings; wages, 31 per cent.; depreciation, 8 per cent; running charges, 27 per cent.; rents, etc., so per cent ; taxes, 17 per cent.; and' the balance for shareholderss 5 per cent.
NEW HAVLAGE SCHEME You are no doubt aware from the news. papers that the Ministry of War Transport
has inaugurated a new road haulage scheme for the purpose of conserving petrol and rubber, and yet, at the same time, keeping the industry in a state of, readiness for any emergency that may arise. ' In effect it means that a minimum of: goodssis to be carried by road, and vehicles so employed are to run at their Maximum efficiency, the remaining vehicles to be kept in perfect running condition :o that in a case of national emergency they can at once play their full part at short notice.
The Minister of War Transport has
requested that certain units of the long-distance-road haulage indastry should proceed with this scheme on a voluntary basis and, while there may be differences of opinion as to the merits of the scheme, on the whole it has been favourably received, 'We have now received the financial arrangements that the Ministry of War Transport is prepared to offer us, and I can only say the r6nuneration proposed—bearing in mind -the voluntary basis—is not generous; in fact, it may be termed inadequate.
METHOD OF CALCULATING REMUNERATION The principle laid down by Parliament is that money should not be Made out of tpe war. Conversely, if 'it is necessary that an industry be kept going in the national effort, it may be assumed that it should not be ,penalized by what is in effect additional taxation thrust upon it through the furtherink of the national effort: This does not, of course, apPlY to a trade whichis outside the war effort, but in our industry it is essential • in.the national interests that it should be maintained in an efficient state. Therefore, one would have expected the Treasury— who, I understand, has the last word in these matters—to have agreed in this voluntary scheme that Excess Profits Tax • standard should be the basis of remunera tion. :The financial proposals, however, do not follow this principle, but set up an entirely new method of calculating the remuneration to be paid. .
Bearing in mind the urgency of conserving man-power it does seem curious that we should have to submit a further set of accounts as a basis of remuneration under the scheme, the fnore so when I tell you that already we have to make one set of profit computations for Excess. Profits Tax and another set forincome-tax—both dif-, ferent from and additional to the •acctients presented to you—and now, if this scheme goes through, a fourth set of _accounts for our remuneration. This means . that our -accountants in the subsidiary companies, .where staffs have been depleted by. the call-up, will have -to do more work; it will _also mean that our accountant at head office will have another set of accounts with all the work thereby entailed, and will probably -mean additional staff.
Shareholders, of course, will wantto know if we go into this scheme exactly how it affects them. As far as we have,been able to ascertain, our profits under the scheme may not be as high as those we have earned in the year under discussion, but they .shbuld be sufficient to pay the dividend on our Preference and he ro per cent.' on the Ordinary, though with, how mach to spare it is impossible at present to state.
ORIGIN OF THE INDUSTRY IT is interesting to look back and see how our• industry was built up, the more so in view of certain ideas at present held as to the necessity of planning for the future. The road industry is composed of about . 66,000 indiVidual hauliers owning about '140,000 vehicles. A great number of the businesses were started by men coming out of the Army after the last war and -with their gratuity money buying a vehicle attd setting tip a business on their own.
This was essentially an individual effort • and one not looked upon with favour by other methods of transport. If at that time there had been what we. might Call, for use of a better word, planned economy and licences, such as appear to be the fashitia 'to-day, this industry would never have conic into existence, just to suppose for Mfg Moment that this had happened; one besttotes to think what the loss to the country would have been in the dark days of loso and rost VITAL IMPORTANCE OF ROAD HAULAGE
.It was this industrY, with its flexibility. and quickness of turn-round, that did so much in distributing food and goods freely in those 'days. .It is fitting recognition of the importance of the industry that, although petrol sand rubber have become such precious commodities, the Ministry of War Transport recognizes the vital importance of the read haulage industry should those -dark days return. However, in spite or the success of individualism in the past, and I hope it' will continue, we are to-day faced with the theory,. of planned economy and licensing.It is essential that this industry, if it is to fight and hold its own, must act as one.
The industry is represented to-day by a number of different trade associations, and there is talk of forming one association to represent the whole industry. For my own part I welcome such an association as I feel convinced that it is essential in'these times for the industry to speak with one voice, and by this method only will the individs ualism of the industry be maintained' and at the same time our rights aclequatelV guarded. • . CURRENT YEAR'S OUTLOOK.
As regards the current year, we have now had eight months' trading, which I am pleased to state shows that our gross turnover is equal to that of ths seine period last year. The last three months, .however, it is impossible to forecast, as the probabilities are that the Government scheme will be in existence and what we receive under that scheme is at present problematical. However, as / have already indicated, I' do net think shareholders need Unduly worry anout the dividend, although they may .have to be prePared for a fall in profits.
The report and accounts were 'unanimouslyadopted.
The retiring director, Mr, A.. Sarnson,
nits re-elected; the auditors, Messrs. 'Peat; Marwick, „ Mitchell. and Co:, were reappointed, and the procedingss.terininated with a vote of thanks to the chairman.