Annual Report 1980

HBF

The Hawkes Bay Farmers’ Co-operative Association Limited

ANNUAL REPORT TO STAFF 1980

SALES

TRADING SALES
Retail   16,291,136
Produce   10,273,444
Grain & Seed   1,657,280
Meat   12,811,587
Marketing & Export   1,442,212
$42,475,659
$140,449,876

COMMISSION AND OTHER SALES
Land   15,614,370
Livestock   45,584,773
Wool   33,272,635
Insurance – General (Premiums)    71,577
– Life (Sum Assured)   1,680,239
Travel   1,750,623
$97,974,217

COST OF SALES

The cost of goods purchased for sale in our Retail and Produce stores and the cost of livestock purchased for export and for our Meat Marketing operation.
$36,018,393

EARNINGS

TRADING SURPLUS   6,457,266
OTHER INCOME   654,780
$7,112,046

COMMISSIONS earned, and WOOL warehousing and selling income
$3,530,307

INTEREST from money lent to Clients
RENT from properties
DIVIDENDS and INTEREST from investments, and SUNDRY ADMINISTRATION INCOME
$1,510,117

$12,152,470

OPERATING EXPENSES

The costs of operating our Company and providing our Customer Services.  These include payments for communications, motor vehicle expenses, sales promotion, stationery etc. and property costs such as rents, rates, maintenance, and depreciation for wear and tear.
(Internal charges for buildings, motor vehicles and plant have been excluded).
$3,193,972

$3,193,972

OPERATING SURPLUS

STAFF
Wages
Salaries
Retirement Leave
Pension Subsidy
Staff Discount
Accident Compensation Levy
Medicare Subsidy
$4,938,721

BORROWED CAPITAL
INTEREST paid on funds used in our operations including clients credit accounts, bank and other borrowings.
$1,183,583

GOVERNMENT
TAXATION   The Government’s charge on the Company’s profit to provide for education, health, welfare etc.
$840,844

RETENTIONS
THIS IS THE AMOUNT RETAINED TO
ensure our Company remains in business, help finance the increasing costs of maintaining our trading stocks and debtors, provide for the future purchase and replacement of land, buildings and plant, and the expansion of our Company’s activities
$1,079,068

RETURNED TO SHAREHOLDERS
DIVIDENDS paid for capital invested by our shareholders and
REBATES paid to our trading shareholders
$916,282

$8,958,498

BALANCE SHEET

WHAT WE OWN

FIXED ASSETS
LAND   2,228,852
BUILDINGS   3,223,495
MOTOR VEHICLES   468,950
PLANT   642,196
$6,563,493

INVESTMENTS
GOVERNMENT & LOCAL BODY STOCK   98,766
DEBENTURES   284,255
INTEREST IN ASSOCIATE COMPANIES   2,105,558
These are companies in which we have substantial shareholdings and in whose commercial and financial policies we participate e.g. Baillie Farmers Motors Ltd.
OTHER COMPANIES   353,199
$2,841,778

CURRENT ASSETS
STOCKS   Retail, Produce, Meat, Manufacturing, General Export & Livestock   8,806,826
DEBTORS   Money owed to us for goods and services supplied, for advances to farmers, and as agents e.g. for livestock sold   18,366,739
CASH IN BANK AND ON HAND   236,626
$27,410,191

WHAT WE OWE

LONG TERM LIABILITIES
MONEY BORROWED on a long term basis by way of:
Fixed Deposits   246,190
Debentures   334,500
Mortgages   62,000
$642,690

CURRENT LIABILITIES
MONEY WE OWE OUR BANKERS   8,181,478
MONEY WE OWE SUPPLIERS for unpaid goods and expenses   6,855,393
MONEY WE OWE OUR CLIENTS for accounts in credit and loans to be repaid in June 1981   5,452,927
PROVISIONS for taxation, dividends and rebate payments to be made in the next financial year   782,785
$21,272,583

SHAREHOLDERS FUNDS

CAPITAL & RESERVES
CAPITAL contributed by our 13,935 Shareholders   4,006,151
CAPITAL RESERVES gains made from the sale of land, buildings and other assets, revaluation of land and buildings, and purchase of Subsidiary Companies   3,334,827
REVENUE RESERVES
Accumulated surpluses retained in the business and revaluation of buildings   7,559,211
$14,900,189

$36,815,462

HBF

FACTS IN BRIEF

1980   1979   1978   1977   1976
Retail Store Sales   16,291,136   12,219,809   11,105,157    10,675,424    9,481,760
Land Sales   15,614,370   9,371,765   6,205,275   8,607,818   5,559,000
Produce Sales   10,273,444   7,917,404   7,047,074   6,505,125   4,794,986
Grain & Seed Sales    1,657,280   1,719,968   1,734,659   1,466,282   1,129,937
Export Meat Sales   12,811,587   13,062,408   11,108,616   12,009,267   8,784,128
Travel Sales   1,750,623   1,468,485   1,138,982   1,204,327   –
Wool Sold (Bales)   79,481   66,655   64,342   67,895   62,312
Sheep Handled   1,244,525   1,188,591   1,087,438   1,151,171   1,150,302
Cattle Handled   82,780   92,149   104,984   115,732   112,618
Advances to Clients   9,652,284   6,409,518   4,044,329   3,074,897   2,743,707
Number of Shareholders   13,935   13,858   13,963   13,959   13,564
Rebates to Shareholders   325,000   365,000   186,000   333,000   370,000
Dividends paid or Recommended   591,282   434,086   240,645   200,537   160,430
Number of Employees   515   442   437   451   451
Total Salaries and Wages Paid   4,489,396   3,413,750   3,041,255   2,851,621   2,545,729
Staff Discount   206,549   156,399   139,347   128,934   120,823
Pension Subsidies   208,666   167,836   156,961   117,323   112,001

HBF

MANAGING DIRECTOR’S REVIEW

The year 1979/80 just completed was one of consolidation and steady progress providing our Company with another record profit. Our first five-year corporate plan has recently been reviewed by senior executives evaluating the actual results obtained with those originally planned. There were few activities that did not develop their potential.

Our profit result has been well received by the financial experts with some now recommending our shares as being under-valued. The mercantile reconstruction and strong drive has really produced results, such as 80,000 bales of wool and 16 million dollars of land sales. This confirms that specific planning of human and financial resources are so important. We now have a mercantile team that must be the most efficient and effective in the business. We have improved our share of the market in wool, livestock and farm produce sales.

The retail division with 268 staff, by far our biggest group, produced record sales and excellent gross profits. The merger of Common Shelton’s softgoods operation with Adairs can only be described as outstanding, and the profit from Adairs has made the investment by our Company well worthwhile. Similarly, Westermans has been another success story and they have received many new customers who were H.B.F. customers. There have been some major changes in retail management over the past year and it is important that all staff should remember that they belong to the H.B.F. group and each division is very dependent on the others.

We have now completed a full year in our new meat manufacturing operation at Taupo, Elm Products. This operation with its twelve staff now have their first-class product available throughout the North Island.

The Export Division has had a very busy year with sales of various products going all around the world. Our most recent development is in forestry and we have contracted to deliver four shipments of logs and sawn timber to the Farmers Cooperative of Japan.

The Administration Division has once again provided the necessary back-up for all operating divisions, including our new ventures. During the year there have been major developments in further computerising certain specific operations. The results of this work will be showing up in the very near future.

Corporate planning for the next ten years is well advanced and staff generally must appreciate there are going to be some changes that may not appear reasonable to them, but are considered necessary for the continued growth and prosperity of our Company. Full cooperation from all staff is required at all times to ensure our Company continues on its current successful path.

A. R. Hutton
Managing Director.