COMPANY MEETI N GS
Page 4
If you've noticed an error in this article please click here to report it so we can fix it.
AUSTIN MOTOR COMPANY
HIGHER LEVEL OF PRODUCTION
.EXPORT SALES k18;000,000 The thirty-fourth annual general meeting of the Austin Motor Company, Ltd., was held on December 8 at Longbridge Works, Northfield, Birmingham. MR. L. P. LORD (chairman and managing director) who presided said:—
The accounts this year were presented in accordance with the requirements of the Companies Act, 1948, and include a consolidated balance-sheet and consolidated profit and loss account. I feel sure that you found the information interesting and satisfactory.
STOCK AND TOOLS First, however, may I draw your attention to the item in the current assets of "Stock and tools" shown at £4,521,600. The increase over last year reflects the higher level • of production in the later months of the . period. No doubt you have wondered how much of this represents stock and work in progress and how much tools. I am sure you will be pleased to know that tools, dies, Jigs, fixtures and press tools are included at less than £200,000. In common with others, your directors are concerned at the problem of financing the repla&ment of prewar fixed assets at the higher price levels now ruling. In order to provide the cash resources for this increase the sum of £500,000 has been transferred, from special depreciation appropriated during the war, to a capital reserve and a further £200,000 has been allocated to this reserve from profit and loss account. The general reserve has at the same time been increased and now amounts to £1,450,000.
By the appropriation of a further £100.000 the sum available as a reserve for the equalization of dividends is now £400,000. The company's contribution to staff pension and benefit schemes has reached a total of 1.595,931 by the expenditure of £66,372 during the year under review.
PRODUCTION In my statement last year I forecast that during the change-over of production from the old 8 h.p. and 10 h.p. models the lowest point in the production curve should be during November.
The change-over started according to programme, but instead of production getting under way and rising after November, output continued low during December and January, and it was not until February that the factory settled down to a steady and rising flow of production. By July we were exceeding all previous weekly records of the company. The causes of this delay were quite beyond our control and are a reflection of the conditions and restrictions under which industry is labouring to-day. In spite of the most careful planning and scheduling on our part, the change from start to finish took five months instead of the normal two, with a consequent loss of export sales, loss of wages to our employees, increase of costs and loss of turnover to the company and, finally, loss to the Exchequer of foreign currency from exports and revenue from taxes and wages and profits.
HIGH LEVEL MAINTAINED Since the end of the financial year, July 31, production has been maintained at a high level The average for August, September and October was 2,281 cars and commercial .vehicles a week, plus 175 tons of spare parts per week. During the six weeks from October 4 to November 15, the average was 2,722 per week, plus 197 tons of spare parts. This may be considered satisfactory, although allocations ofmaterials are restricting us below our capacity of 3,400 per week. With regard to the actual models we are making, the "A40" announced last year has built up for itself a world-wide reputa tion for quality of workmanship and economy of operation, and is undoubtedly the most popular car we have ever produced. The new A70 Hampshire" and the "A90 Atlantic Sports," which are just coming into production, have been extremely well received everywhere, and our output has already been covered by orders a long way ahead ; in fact, the demand for all our products—cars, commercial vehicles, utility models, pick-ups, marine engines, etc.—is so phenomenal that figures giving the value of these orders become meaningless. If we. sought more orders these figures, and our consequent embarrassment, could easily be increased. At the same time, manufacturers cannot estimate the true value of the business on their books because everyone is tempted to order far ahead of possible delivery.
INCREASED EFFICIENCY
The process of increasing production efficiency at Longbridge continues as rapidly as circumstances permit. New machinery is arriving constantly, although not as quickly as we could wish. The site for the new chassis erecting and body mounting and finishing shop is being levelled and prepared. When completed next year we believe this shop will be the most modern of its kind in Europe, and will certainly 'compare most favourably with anything of its kind in the United States.
Your staffs were gratified and encouraged by the very favourable comments passed on the Longbridge plant by the American members of the Productivity Council. We are indeed fortunate in the very friendly contacts we have preserved through the years with the large American automobile manufacturers, and in the kindness and courtesy with which they always welcome our engineers on their frequent visits to the United States.
EXPORTS As the paramount need still continues to be for export, I know you will wish me to say something on that subject, although as I have commented at such length on other matters, my remarks must be short.
Your company is proud to continue to play a leading part in. the country's export drive. We have over two hundred main Austin distributors operating in the world markets, and their good will and their orders continue to grow, During the year under review we sold overseas £18,000,000 worth of vehicles and spares and, most important • of all perhaps, this included $12,000,000 for products sent to U.S.A. and Canada. During the week ended December 4, the Minister of Supply visited the works and saw a batch of cars leaving for the United States which brought our despatches to the North American continent up to $22,000,000.
IMPORTANT CANADIAN DEVELOPMENT
Our most important development in that continent during the year was the purchase in Hamilton, Ontario, of 30 acres of land with very fine buildings of 135,000 square feet. We have options on the remainder of the site which, if taken up, will make a total area of about 100 acres. It is so situated that its value must appreciate considerably ; in fact it has already done so. Members of our senior staff are there at this moment preparing for the installation of plant, to be supplied in the main from this country. Chassis and bodies will be assembled from parts sent initially from here, and the planned output of vehicles to be painted, trimmed, finished and tested there is 500 per week. The value of the new British plant to be shipped is £200,000, and when completed next year ,this, the first British automobile plant in North America, will be as.up-to-date as any to be found there, and we believe will enhance the reputation of British products in that all-important continent. Doubts are often expressed as to the longevity of the market over there. I have no serious misgivings, and firmly believe that if we are allowed to make the most of our present opportunities and plan and act boldly without interference, we can build up a substantial asset for the future, although the present and near-future operations cannot be very remunerative.
AUSTRALIAN FACTORY
You will also have noted that our Australian factory in Melbourne is doing well, and that we have just bought a 112acre site near Cape Town in South Africa in readiness for further deyelopments in that country.
NEW CAPITAL ISSUE You will have received with the notice of meeting a resolution to subdivide 625,000 of the unissued shares of £1 each into 2,500,000 shares of 5s. each and authorising the directors to issue them as Ordinary shares or " A " Ordinary shares as they may think
Arrangements have now been completed for the issue of 2,071,556 Ordinary shares of 5t each and, subject to the passing of this resolution, the necessary notices to stockholders will be sent out on Friday. December 10.
FINANCE FOR EXPANSIONS The additional money is required to finance the continued eir,tansion of the company's business and, in particular, for the further extension and modernisation of the works and the development of the business in Canada, the United States of America and in South Africa. Profits for the year ended July 31, 1948, were affected by the dislocation of the works for three months while the change-over to post-war models was taking place. In view of the orders in hand and the high output now being achieved, your directors anticipate that, subject to no adverse unforeseen circumstances arising. the company should be able to maintain the dividend on the increased capital.
SHAREHOLDERS' RIGHTS If you were registered in the books of the company on November 13 as a holder of Ordinary and/or " A " Ordinary stock, you will have the right to take up four new Ordinary shares at the price of 25s. per share for every five 5s, units of Ordinary and/or " A " Ordinary stock then held. In addition, all stockholders will be entitled to make application for the new Ordinary shares which are not taken up in the first instance by the Ordinary and/or "A" Ordinary stockholders in respect of their rights. CO-OPERATION OF EMPLOYEES, SUPPLIERS AND AGENTS My statement this year has been longer than usual, but I feel sure you will agree that your company continues to make good progress in spite of many handicaps, and due to the enthusiasm, good will and energy of your staffs, work-people, suppliers and agents, we and they may look forward to the future with confidence even under existing conditions. I know that you will join with me in expressing to all of them our sincere thanks and good wishes. The report and accounts were unanimously, adopted and dividends of 20 per cent. on the Preferred Ordinary stock and 40 per cent. on the Ordinary and "A" Ordinary stock, were approved. The retiring director, Col. A. C. R. Waite, M.C., was re-elected and the directors were authorised to fix the remuneration of the auditors, Messrs. Carter and Co.
A resolution was also passed sub-dividing 625,000 of the unissued shares of £1 each into 2,500,000 shares of 5s. each and authorising the directors to issue them as Ordinary shares or "A" Ordinary shams.