COMPANY MEETING

F. W. WOOLWORTH AND CO., LTD.

ANOTHER RECORD YEAR CONSIDERABLY INCREASED SALES MR. W. L. STEPHENSON'S ADDRESS THE thirty-first annual general meeting of F. W. Woolworth and Co., Limited, was held on January 26th at the Connaught Rooms, Great Queen Street, London, W.C.2.

Mr. W. L. Stephenson (chairman) said the salient figures to note are that the net trading profit before taxatioo at £7,612,607 75. 7d. shows an increase of £651,459 as. 8d over the previous year and constitutes a new high record. (Applause.) The provision for taxation to date at £2,950,725 7s. 2d., an increase of £918,979 8s. 9d., is also a new high record, and the net profit, after taxation, at £4,661,876 os. 5d., shows a reduction in net earnings of £267,519 los. Id. compared with the 1938 figure.

The handsome addition to trading profit is the outcome of con- siderably increased sales. A nice gain had been accumulating up to the end of August, and when the war commenced the company was in the very fortunate position of having on hand stocks of merchandise which, from a low datum at the commencement of the year, had been built up to a figure much in excess of normal. During the first few weeks of the war period the demand for this merchandise was so heavy, and the sales so large, that our stocks were very soon reduced to a dangerously low condition. Peace- time values were eagerly sought and rapidly disappeared from our stocks. For a time the railway companies were so preoccupied with the important task of moving troops and war materials that deliveries were uncertain, and in many cases very much delayed.

Our manufacturers were able to place at our disposal consider- able stocks of goods which had been prepared against our regular trade requirements, and our customers reaped the benefit of that condition. I must emphasise the obvious fact that the supply of merchandise to our business is its very life's blood. Manufacturers were faced at once with many difficulties, dearth of materials, rising prices, the requisitioning of plant and machinery for war work, depletion of staff, &c. With very few exceptions, they recognised the importance of maintaining the very large market they had built up through the medium of the unique distributing facilities of the company, and every effort was made to hold down prices and keep supplies coming forward.

SATISFACTORY STOCK POSITION After the first few weeks of dislocation much-needed supplies began to flow into the branches, and the figure in the balance-sheet of stocks on hand at £4,156,450 16s. 7d. indicates a remarkable recovery in the stock position after the heavy depreciation to which I have referred, and it gives me the opportunity to pay both our manufacturers and the carriers a well-earned tribute.

Our business suffered very much in some directions, notably the larger establishments in vulnerable areas which had experienced very heavy evacuation. In other directions our sales space was taken by the local authority to provide air-raid shelters for the public. Nevertheless, we were fortunately in a position geo- graphically to more than make -up the sales lost by the greatly increased business done in neutral and safe areas.

It was noticeable that, whilst there was a falling off in the demand for fancy, novelty types of goods, it was much more than offset by increased sales on staple, usable articles and commodities. The cutting off of import supplies had little effect as we have depended upon them in the past only to a small extent. Our somewhat ambitious programme for expansion for the year 1939, foreshadowed at our last general meeting, was not carried through in its entirety. Twenty-two new stores were added, bringing the number of branches in operation to 759. Consider- able extensions and replacements were carried out.

The substantial increase in the item freehold properties includes a number of sites which have passed into our possession, secured with the object of providing enlarged and improved accommodation in important centres. The board are investigating the possibilities of proceeding with the construction of some of these major proposi- tions, as it is desirable to maintain in employment important elements in the construction department.

I do not think it is necessary for me to quote other figures in the accounts, - but I can assure the stockholders that all non- permanent items such as expenditure for air-raid shelters for the protection of our staff in the vulnerable areas (an amount running into six figures up to the end of the year) have been charged off. It will be noted that we have taken the value of investments at the market price at the end of the year, which brings a reduction in assets of £33,916 r5s.

THE STAFF AND THE WAR I think I can bring my few remarks in relation to the operation of the company for the past year to a fitting conclusion by referring to the very excellent work done by the company's staff. The advent of war at once changed the routine of our people. Our younger men as they joined the fighting services left positions

which had to be filled in a temporary manner until their return. Fortunately there was an ample supply of capable men and women ready and anxious to step into these breaches and carry on the job on a temporary basis. In every instance it is understood that the Service men will regain their old positions when they retunu. (Hear, hear.) For those employees who are members of the company's pension scheme, and who have joined the armed forces, arrangements have been made for their contributions to be suspended whilst they are away, but they still remain in the pension scheme and wiil not lose any benefits that might have accrued to them when they return to civil life. The Service pay of these men is also being augmented by the company. (Hear, hear.) You will also realise that practically during the whole of last year there was a heavy demand for labour from factories and mills engaged in producing war supplies, and it is a remarkable fart that in the face of this competition for the services of employees, I do not believe in the history of the company we have ever suffered less turnover in staff than in the past year.

I sincerely express on behalf of the board, and of the stock- holders, thanks and appreciation to the whole staff for their loyal efforts in the past year In regard to this year I can see no other course open to us than that of carrying on the business of the company with every conceivable energy. There will be difficulties both in regard to supplies and prices, but we have met and overcome difficulties before, and we feel that while temporary expedients might have to be adopted, we shall manage to keep in being a wide range and variety of regular Woolworth articles on which our business has grown. Quite apart from the matter of more or less profit, there is the all-important goodwill of the Woolworth customer to be protected and retained.

With the highly valued collaboration of our manufacturers, our aim will be to prevent any unwarranted increase in price or reduc- tion in value. It is inevitab:e that there will be changes—some, indeed, have already taken place—but the object of our large buying force will be to service the public with a minimum of alteration I know it cannot be too pleasing for a stockholder to realise that although the company has enjoyed a record year, the dividend warrant is* for a lesser amount. But there must be some pride and satisfaction in the knowledge that a sum just short of £3,000,000 in direct taxation will at once be handed to the Govern- ment as the result of the company's trading efforts of 1939. It may well be that the Government will participate in the earnings to an even greater extent in the near future, but I find in this no reason for an easing off in effort. The paramount objective of the board during these difficult times is to use the resources and experience we have to maintain the business in the highest possible state of efficiency, and thus protect the tremendous goodwill we assuredly enjoy and hold together our very large staff.

ALLOCATION OF AVAILABLE BALANCE

If we turn now to the report we find that adding the balana brought forward from the last account, we have a sum of £13,084047 3s. 4d. to deal with. Provision for taxation to date has already been referred to. The dividend on the Preferred stud, after tax, is £195,000, and the interim dividend of 9d. per unit, less income-tax at 5s. 6d. in the £, is £875,625, and after deduct- ing these amount we have a balance available of £9,119,696 16s.2(1 The directors now recommend to you that this balance should be dealt with as follows: £ s.

Transfer to Freehold Building Reserve (this odd amount is to bring the Freehold Building Reserve on our books to exactly £600,000) ... 107,079 13 1

Transfer to Reserve for Staff Benevolent Fund i zo,000 0 Payment on February 15th next of a final divi- dend of Is. 96. per unit, less income-tax at 7s. in the £, OD 303000,000 5S. units of Ordinary Stock ... 5,706,250 0 0 Payment on the same date on the Ordinary Stock of 96. per unit Cash Bonus, less income- tax at 7s. in the £ ... 731,250 0 1 These recommendations, if adopted, will require the SUM £2,648,579 13s. 8d., leaving a balance to be carried forward d £6,471,117 2s. 6d., which adds £1,002,671 63. 96. to the amoie carried forward. I trust the stockholders will agree ‘rith itit board in feeling that the final distribution ecommended is a cre servative and sound one in the circumstances.

FUTURE DIVIDEND PAYMENTS

It has been the practice for the company to pay the final den on February 1st. You will now notice that the date is as February 75th. We have had to extend the time necessarY our transfer office to draw the dividend warrants owing to growing number of the stockholders. A year ago I helic,re mentioned that we had approximately 50,000. I am informed l, now have 65,poo stockholders and it is not surprising thil little more time is required for the work entailed in paying dividend. For the same reason it has been proposed that the of the %interim dividend on Ordinary stock shall be changed June 75th to August 15th. This will not then clash with interim dividend on the Preferred stock due for payment J001 Furthermore, in order to bring the interim dividend on Ord stock more into line with the final dividend, we propose 20 in that from 96. to Is. per unit, provided, of course, the conditions at the time warrant such procedure.

The reports and accounts were unanimously adopted.

a rr