Company "Milked Dry" of Cash
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i% CLAIM that Red and White Serri 'vices, Ltd., had been "milked dry 7 of cash was made at the resumed hearing in Cardiff on Monday of the appeals by 44 Welsh local authorities against the decision of the South Wales Licensing Authority to grant fare increases to six major bus companies.
Mr. Meurig Evans, for the objectors, told Mr. Tudor Davies, the Ministry of Transport inspector, that the Red and White company were at one time flourishing with both ,fixed and liquid assets. Before being taken over by the British Transport Commission, however, they paid out to shareholders practically the whole of their liquid assets in the form of dividends. The money involved was nearly £500,000.
"Ever since then this group has been suffering from a shortage of cash and had to borrow. Is that a justification for putting the whole of the burden of these increased fares on the public?"
When the hearing was resumed on Tuesday, it was alleged that Red and White stood to make a profit of £63,000 this year without any increase in fares.
Mr. Evans said that the figure he c2
quoted was only an estimate. As the company had consistently underestimated their profits during the past two years, the Licensing Authority had no real evidence on which to arrive at his conclusion that they could not meet their increased costs. In 1952, he claimed, the company had made a profit of £96,000, although their costs were X118,000 in excess of estimates.
Mr., Maurice Holmes, replying for. the company, said the Licensing Authority thought the application for increased revenue of £83,000 was fully justified. He denied Mr. Evans' statement that revenue had increased by £600,000 in the past two years.
The figure of £1,029,272, which Mr. Evans had claimed was the company's revenue in 1950, referred only to one undertaking in the group of five. The total group revenue was £1,340,000 and the increase was only 1260,000. Costs, over the same period, had risen by £272,000.
Mr. Evans submitted that the main question was whether the companies were. to b.e regarded solely as profitmaking concerns or as public utilities.