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Cm* in Wm Wilt

29th July 1977, Page 34
29th July 1977
Page 34
Page 34, 29th July 1977 — Cm* in Wm Wilt
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Which of the following most accurately describes the problem?

TOGETHER with my colleagues I would like to bask undisturbed in the warm glow of success attributed to my company in CM July 15. To do so, however, would be a disservice to the haulage industry, which, from inflation, faces the severest threat ever encountered.

When the accounting profession itself is divided on how best to account for inflation, it perhaps causes no surprise that hauliers fail to understand the problem and the pressing need to come to terms with it.

In the light of inflation, "TDG's Outstanding year" was not so outstanding. A leading firm of stockbrokers, analysing figures of a number of public companies, threw focus on the results of my company by adjusting profits and assets to take account of inflation. On that -basis, the return on capital for 1976 was 6.7 per cent in a year when interest rates were twice that amount.

Indeed, this independent assessment served to re-emphasise the view clearly set out in our accounts in a section dealing with inflation which showed that, after paying a small increase in dividend (an increase less than half that of the inflation rate encountered during the year) and providing funds to replace our assets at current prices, we had accomplished little else.

In reporting on the previous year's results, I had told our shareholders that the rapidly-escalating costs burdening industry could not be met by increased productivity and frequently were not being recovered by increased charges. Even then, it was apparent that operators, large and small, were not taking into the reckoning the mounting cost of new vehicles and the difficulties shortly to be encountered in financing replacement.

A year later, on the same scene, I reported to shareholders that hauliers with diminishing fleets.

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