COMPANY MEETING
LONDON BRICK COMPANY
RECORD DELIVERIES
SIR P. MALCOLM STEWART'S SPEECH
Tan thirty-eighth ordinary general meeting of the London Brick Company Ltd. was held on March 1st, at the Connaught Rooms, London.
Sir P. Malcolm Stewart, Bt., O.B.E., LL.D., J.P. (the chairman), in his speech, said : Turning to the profit and loss account you will see that the profit from trading amounts to £563,477, an increase over last year of £5,708. Interest and dividends on investments at £25,840 arc lower by £7,454. The total revenue of the company at £589,654 is down by £1,915. The sum of £150,000 has been set aside for depreciation and utilised in writing down the works assets. After providing for the dividend on the 8 per cent. Preference stock, the profits earned enable the directors to recommend a final dividend on the Ordinary stock of 5 per cent., less tax, making 20 per cent. for the year. The sum of £4,489 remains to be added to the carry- forward, which will then stand at £80,000.
During the past year our sales executive encountered difficulties of a character not experienced for many years. They centre round the early months, when we suffered a long run of climatic conditions unfavourable to building operations, and were faced with a marked decline in the demand for building bricks. It became impossible to determine how far the shrinkage of demand was due to abnormal weather conditions and how far to actual falling off in demand. Nevertheless, we continued on full production in the belief that an increased demand would eventuate. Meanwhile stocks accumulated heavily.
However, our courage was rewarded. The demand came, but too late to clear stocks as rapidly as we should have liked. Not until June did our sales satisfactorily expand. In that month and in the month of July we made monthly deliveries exceeding 160,000,000. Thereafter trade was well maintained, and despite the poor trade in the early months we closed the year with record deliveries. The increased volume of sales was successfully effected through the considerable widening of the area of distribution made necessary by the changing location of building activity, there being increased building in the Midlands and the North in which we have partici- pated. This involved the production of a larger percentage of three- inch bricks, 2g-in. being normal for the requirements of London and the South.
There is no doubt that house-building in London and the South has been slowly falling off, but this was partially offset by an increase of larger building operations in this area.
These are the circumstances which have compelled us to increase the area over which our products are distributed. Despite the larger turnover, the cost of production and rail and transport charges was materially higher, and continues to advance. Nevertheless, we persist in our policy of keeping down the price of our products to the consumer, and thus make an effort to thwart the tendency of rising prices, which must discourage building operations.
During the past year we not only achieved records for common building bricks, but also for all the specialised products of the company. Since we introduced our rustic facing bricks 12 years ago 600,000,000 have been sold, and to meet the present demand, which comes from all parts of the country and for all types of building, we are manufacturing 3,000,000 per week.
OUTLOOK FOR CURRENT YEAR.
I will now comment on the prospects for the current year, and in doing so must at the outset refer again to the somewhat changed circumstances of trading experienced in the last year. These make me feel that it is not possible to give you quite the same confident forecast that I have made, fortunately correctly, for many years past. There is another factor which influences us. For the past 13 years the average annual dividend on the Ordinary shares or stock has been rather over 20 per cent., and in recent years we have regularly paid three interim dividends of 5 per cent. and a final dividend of not less than 5 per cent. I am conscious that many of our stockholders receiving such interim dividends punctually regard them as a sure indication of a final dividend of not less than 5 per cent. Their outlook has become one of expecta- tion of a certainty, and, frankly, I should be happier should we maintain 5 per cent. interim dividends, as I hope we shall do, if stockholders would regard the payment of a final dividend of 5 per cent. as a matter of hopeful expectation rather than as an assured certainty.
I am not pessimistic about the prospects of the year ; indeed, helped by favourable weather and the efforts of our sales department, we have for the first two months obtained definitely better results than for th.! corresponding period last year, and there is today a reasonable prospect that we shall maintain our turnover. It must, however, be remembered that it is early in the year to make a forecast and we have a colossal production to market. Therefore, I am not in quite the same position to make the confident forecast of previous years, but have decided it is necessary to be candidly cautious, and, if careful attention is paid to what I have outlined, I believe you will not be disappointed with the results which we shall submit to you when, all being well, we meet next year.
The report and accounts were unanimously adopted.
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