COMPANY MEETING
ARMY AND NAVY STORES, LIMITED
IMPROVEMENT IN SALES TOTAL
THE annual general meeting of the Army and Navy Stores, Ltd., was held on April 13th, on the Company's premises, Howick Place, Westminster, S.W.
Brigadier-General Sir Frederick Gascoigne, K.C.V.O., C.M.G., D.S.O. (chairman and managing director), in the course of his speech, said : Ladies and gentlemen, when I addressed you last year I finished my speech by reminding you—perhaps I should say warning you—that the year 1936—the year we were then dealing with—was abnormal in that it contained fifty-three trading weeks, whereas in the year 1937 we should only have fifty-two trading weeks. Notwithstanding this reduced trading period we have more than maintained the gross profit earned in the longer year, though the net profit is down by a little over £9,000. No less than £8,838 of this reduction is accounted for under the heading of rates and taxes.
Moreover, a full year's contribution to the Employees' Retiring Allowance Fund was borne for the first time, and this, with the Coronation bonus, added a further £8,000 to our working costs. Without these additional expenses, amounting to nearly £17,000 —one of which is non-recurring—we should have again shown an increased net profit, which, with the shorter trading period at our disposal, would have been a better result than I encouraged you to look for when I addressed you last year.
Sales were very good during the first half of the year, but except for an excellent Christmas trade they were disappointing during the latter six months. For the whole year they showed a slight relative improvement, a gratifying fact in view of the increase in income tax and the corresponding reduction in private incomes.
For there is no good closing our eyes to the fact that the staggering taxation of the present day, unavoidable as it may be, must have a great effect on the spending power of our clientele, and I am afraid this must be reflected eventually in our sales. You will remember that at our last meeting we were considerably worried about the National Defence Contribution—a new tax which had been sprung upon us. We hoped for modifications, and, fortunately, they came. Nevertheless, this tax has cost us about £6,000 for the ten months, and will cost us more for the full year. This, of course, means so much less money at our disposal to distribute.
ALLOCATION OF PROFIT There remains for distribution a sum of £271,387 1os., after adding £124,870 14s. id.—namely, the amount brought forward from last year—and deducting £34,166 13s. 4d. already paid as interim dividend. I told you last year that, in regard to the 3d. bonus recommended for payment in addition to the 123 per cent. dividend, it was a completely open question as to whether it could be repeated and that this must depend on the results and circum- stances of future years.
In spite of the extra expenses entailed and the consequent decline in our net profit, the fact remains that we still had a good year, and your board, after careful consideration, came to the conclusion that in all the circumstances they would be justified in again recom- mending payment of the bonus on the present occasion, and we there- fore propose to ask you to allocate £88,833 6s. 8d. to provide a final dividend of rod. per share plus a bonus of 3d., which, with the interim dividend of 5d., will make a total dividend for the year of ts. 6d. per share, or 15 per cent.
The signs of the times are such, however, that I should be failing in my duty towards you if I did not say that this bonus which has now been recommended for the second year in succession must certainly not be looked upon as an annual affair, and it is for that reason that we prefer to call it a bonus, rather than a part of the regular dividend. On the results of the past year—and, after all, we are dealing with the past year—we feel we can reasonably recommend this distribution while not omitting provision for future needs. The results of the current year remain to be seen—we can only deal with them on their merits when we know what they are.
The changes in the system of government in India do not seem to have affected our business out there in any way. It has been satis- factorily maintained, and though it fluctuates considerably owing to the incidence or otherwise of large furniture orders from States or ruling Princes, the ordinary general trade remains fairly consistent. The new branch at New Delhi has already proved to be of use to our clients, and may be said to have done as well as could reasonably be expected for its first year. It was no doubt sound policy to open up a branch there and thus keep the Society's activities well to the fore in view of the increasingly important position which New Delhi holds.
Our new year began on February 1st. If you ponder on the events which happened during the six or seven weeks following that date— on the rumours which have floated around—on the Stock Exchange repercussions--on the fears of increased taxation—you would hardly expect me to tell you that we have begun the year in a promising way. Nor can I do so. We have not. I am not going to talk politics and am not going to make any forecasts. Nevertheless, I do not in any way despair that better things may not obtain before the year closes.
We have got a sound balance-sheet, good reserves, an establishment which is getting more and more up to date every year both in its structure and the services it provides, and it only requires the continuance and ever-increasing development of your good will to ensure the maintenance and progress of its prosperity.
The report and accounts were unanimously adopted.
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