COMPANY MEETING

BOOTS PURE DRUG CO., LIMITED

THE fiftieth annual ordinary general meeting of Boots Pure Drug Company, Limited, was held on June 16th at Station Street, Nottingham.

The Right Hon. Lord Trent, Chairman of Directors, said :- PROFIT AND Loss ACCOUNT Our trading profit, after providing for contributions to staff pensions funds, management remuneration, and income tax, and also after deducting £36,000 for our National Defence Contribution, amounts to £940,332, against £966,116, a decrease of £25,784.

DIVIDEND PAYMENTS

The net balance, after charging all these items amounts to £762,625, a decrease of £37,273.

After payment of all preference and preferred ordinary dividends, and of four quarterly dividends of 6 per cent. less tax on ordinary shares, we have a balance of £281,875, which, together with the balance brought forward, amounts to £598,862, as compared with £617,238 last year. Your directors recommend the payment of a bonus of 3d. per share free of income tax, on the ordinary shares, absorbing £8o,000.

RESERVE FUND Your directors do not consider it necessary to increase the General Reserve Fund at the present time, but in view of the trend of taxation, and the even heavier burdens foreshadowed in the Chancellor of the Exchequer's Budget speech, they recommend a transfer of £50,000 to Taxation Reserve. In addition, they recommend the transfer of £72,132 to Freehold Property Reserve, £16,772 to Works Develop- ment Reserve, £33,228 to Overseas Development Fund, leaving to be carried forward to next year £346,730.

The company's holdings of Government securities have now been finally disposed of, resulting in a capital profit of £56,140, and your directors recommend that from this sum a special cash capital distribution of 2d. per share (not subject to tax) be made to ordinary shareholders. This will absorb £53,333, and it is proposed that the balance of £2,807 be divided amongst the various Boots' Benevolent Funds at the directors' discretion.

NEW BRANCHES

Our subsidiary companies have continued to make progress, although they also have suffered from the necessity of paying N.D.C. During the year we have opened thirty-one new shops and closed three, so that on March 31st we had 1,180 branches.

A POLICY OF CAUTION

At the general meeting in 1933, I said : " Our aim is to build a well-established sound business, and not to show figures merely to influence the market price of our shares." That remains our aim and our policy. It would have been easy and popular to distribute a larger proportion of our profits, but your directors feel strongly that the times in which we are living are too uncertain to justify a departure from the policy we have followed in recent years of accumulating and consen in; our resources.

• Reference should be made to the great new factory at Beeston for the manufacture of dry goods, which is almost completed and is already in partial operation. It was designed by Sir Owen Williams on similar principles to the neighbouring " wets " factory. The Beeston factories will constitute, fiom the point of view of aptness for function, probably the forest group of factory buildings in this country, if not indeed in this hemisphere.

WHOLESALE AND EXPORT

The wholesale connexion at home has continued to expand and the export figures show a material increase. Our action in increasing the number of representatives in India has been justified by a steadily increasing sale of our products in India, Burma, Malaya and Siam. Following a visit paid by the head Of our wholesale and export department to Egypt, Palestine, Syria and the Sudan, agencies were arranged and extended in those markets, with results that up to date have been most encouraging. During the year, also, our trade in Canada and South Africa has shown healthy development and our medical specialities are enjoying a growing demand in these Dominions.

NEW ZEALAND

With regard to New Zealand, your Directors are quite satisfied with the steady progress which our two pioneer branches in Auckland and Wellington have made in all sections. We have not yet been able to open further branches in New Zealand owing to the Govern- ment's conservative policy in regard to the pharmaceutical industry, but with public opinion on our side we have every hope that restrictions on our progress in the Dominion will gradually be removed.

VETERINARY PRODUCTS

In the veterinary section our extensive range of products are increasingly in demand and notable additions are being made as the result of constant research and experiments in which we enjoy the collaboration of some of the leading veterinary practitioners.

GARDENING PRODUCTS

The horticultural section also reports a year of interesting develop- ments including the elaboration of a wide range of new products of interest to gardeners. In elaborating these products we have consulted the best-known research stations.

RECORD SALES

The total volume of trade, number of prescriptions dispensed, and numbers of customers, all reached record figures. In fact, we had over 169,000,000 sales transactions, that is 3# millions a week—and dispensed 15o,000 prescriptions a week—and this in spite of the absence of any widespread epidemic. Business has continued to expand, although not to a sufficient extent to offset increased taxation combined with increased expenses. Every effort is made to cope with the highly important problem of keeping expenditure within due limits, but wages, rents, rates, freights, fuel, lighting, raw materials of all kinds, in fact all our essential costs, have shown an upward trend. In a few instances, we have been compelled to put up our prices, but as a general rule, we have been at pains not to pass on to the public the extra cost of bottles, containers, &c.

SOCIAL SERVICES FOR STAFF

At March our staff numbered 21,784, an increase of over goo during the year. This constant increase of shops and staff naturally means more opportunities of promotion for the keen, bright man or woman. It is once again my pleasant duty to recall how much the firm owes to the loyal and enthusiastic co-operation of the staff. Admirable work is done by the various branches of our organisation which are concerned solely with questions affecting personnel. Our social services include, for instance, pension schemes, a con- tinuation school . for juvenile workers, medical services, welfare departments, canteens, staff-training classes, sport and social clubs, dramatic and other societies, house magazines and educative films, and a host of kindred activities. Recently we have introduced certain changes in personnel control—and others are contemplated—with the object of still further improving and strengthening the contacts between management and staff.

REVIEW OF PROGRESS

The figures I have put before you concerning our progress, our profits and our resources, judged by any other standard than our own, and in view of all the circumstances, might be considered satisfactory. But I should not be frank with you if I did not say that your directors would have greatly preferred, in this our Jubilee year, to report, in addition to record figures of sales transactions, staff employed and branches working, profits and prospects which would justify a larger distribution to the shareholders or special concessions to the staff, or both.

If the shareholders have not had an increase of dividend it is fair to recall that the present rate of dividend has been maintained for several years and was not reduced in the years of bad trade. As to the staff, as I have already indicated, the concessions made to them in recent years have involved us in substantial increases of annual expenditure.

HOLIDAYS WITH PAY

There has, for instance, been much talk lately about the granting of holidays with pay. This, of course, has been our practice for many years. During the last few years we have materially reduced the hours of work, without reducing pay (which entails the engage- ment of extra staff), and though it is not feasible to put a five-day week into practice on the retail side of the business, we have granted extra holidays with pay, as well as reducing hours by introducing later times for the opening of shops, and extending meal times.

COLLABORATION WITH SCIENTISTS

We have continued to conduct our medical and scientific research work in close collaboration with distinguished research workers in the Universities, hospitals and other institutions. Their advice has been invaluable, particularly in connexion with our range of Special Medical Products, which has been extended during the past year. At the same time, we make our own contribution to the medical research work of the nation by contributing or loaning chemicals or apparatus to other research laboratories, by providing our consultants with qualified research worker to extend the scope of knowledge in special fields, and by placing the results of our own investigations and experiments in the common pool. In these and other ways we keep abreast of current medical discoveries and play our part in the development of scientific knowledge.

A.R.P.

During the year, with the eager co-operation of Lord Mayors, Mayors and the local authorities, we have displayed our model gas-protected room, accompanied by explinatory talks, in some 8o cities and towns throughout the country. Some 300,000 persons have visited these displays, and the publicity given to them in the Press has provided further valuable propaganda for A.R.P., of which the Home Office has expressed its deep appreciation.

MINISTER OF HEALTH'S TRIBUTE

On the occasion of the official celebration of the company's fiftieth anniversary earlier this month in London, we were honoured by the presence of the Minister of Health, who, in paying an enthusiastic tribute to the founder of the company, expressed the view that to provide good shops giving good service for money and good condi- tions for the people who worked in them, was as public-spirited an action as any man could do. Mr. Walter Elliot, in those words, I think, summed up the general principles that have guided and should con- tinue to guide the policy of the company.

FUTURE PROSPECTS

While I have every reason to express the Board's complete confi- dence in the vitality and expansive powers of our company, the fortunes of a great retail business like ours must be intimately bound up with the purchasing power of the public, and that is a factor over which we have no control. It is impossible to shut one's eyes to the trend of prevailing economic conditions. The future is too uncertain to warrant any expression of easy optimism, but on the other hand, the broad foundations of our business and the careful financial policy we have pursued over many years combine to place us in a powerful position to face as successfully in the future as we have done in the past any rough weather we may encounter.