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Aviation History
1949
1949 - 1030.PDF
JUNE 2ND, 1949 CHAIRMAN'S SPEECH FLIGHT 26th MAY, 1949 Advertisements. 19 ANNUAL GENERAL MEETING THE BRISTOL AEROPLANE COMPANY LIMITED The Report of the Directors and the Statement of Accounts for the year ended 31st December, 1948, are in your hands, and it will no doubt be your pleasure that they should be taken as read. ACCOUNTS. This is the first occasion on which the provisions of theCompanies Act, 1948, have been applicable to this Company's Annual Accounts. As noted and explained in the Report, somealterations have been made when compared with previous years, including the introduction of consolidated accounts, but in themain our past practice was substantially in accordance with the new requirements. PROFIT and LOSS ACCOUNT. The trading profit shown in the Company's accounts relatesto the Parent Company. A subsidiary the HOUSING COM- PANY (as appears from the consolidated accounts) earned duringa year of transition a small profit to be added to the £38,585 net profit arising from the previous year. Of the Company's associ-ated Companies, ROTOL LTD. earned a satisfactory profit which it has retained to supplement its working capital, and theactivities of BRITISH MESSIER LTD., which is still in its formative stages, resulted in a small loss which has been carriedforward in its books. Other income included interest, transfer fees and an excep-tional item of £60,650 received from overseas. You will notice that the charge for depreciation this year(£337,154) shows a considerable increase compared with 1947 (£257,088). This increase of £80,066 arises chiefly in respect ofmuch of the Crown plant and equipment already in use in our works, the purchase of which in January, 1948, was reportedto you last year. Substantial as the charge is, it still does not provide adequately for the cost of providing replacements ofequipment at current market prices; accordingly, with these factors in mind, we have increased the transfer to General Reservefrom £150,000 in 1947 to £300,000 this year. Other charges against the trading profit do not require explana-tion, but the charges for Income Tax and Profits Tax cannot pass without comment. It is no new thing to be faced with heavydemands for taxation—demands which proceed upon false assumptions as to the value of money in terms of plant andsupplies and thereby effectively deprive industry of necessary liquid resources. The case for reform, to which I referred lastyear, has been strongly pressed, but so far one can only note the provisions of the new Finance Bill designed to afford an increasein initial allowances and the promise of the Chancellor to examine through an independent Committee the method of computingnet trade profits; it is to be hoped that the Committee can speedily arrive at effective recommendations. After deducting auditors' fees and expenses and Profits Taxand Income Tax and bringing in the balance at credit of profit and loss account at the beginning of the year, the balance in handis £711,647, so that deducting the increased transfer to General Reserve, to which I have just referred, there is available fordistribution £411,647. Justifiable sympathy for the stockholders in these times of the rising cost of living might have encouragedus to increase our dividend distribution, but wider considerations of national policy, as indicated to us by the Chancellor of theExchequer and the Federation of British Industries, and the need for liquid resources, have had to take precedence. We aretherefore conforming to the Federation's policy of moderation and restraint in dividend distribution in the hope that some reallyworthwhile benefit will in the end accrue to the country. Last year and this year have each seen an increase in the balancestanding to the credit of the Profit and Loss Account. This additional money is being put to good service in the Company,just as the anti-inflationary economists would wish, but it is natural that stockholders who have accepted a modest returnfor so long should feel disappointed that no additional benefit from the Company's undoubted successes has yet accrued to them. BALANCE SHEET. Turning to the Balance Sheet, you will find one or two pointsto which attention is drawn in the Directors' Report and upon which further comment may be helpful. Share capital remainsunchanged. Excess Profits Tax refund also remains unchanged, though a final settlement with the Inland Revenue should seesome increases in the figure of £817,269. General Reserve now amounts to £1,850,000, and is supplemented by a ContingencyReserve of £350,000 ; together, these reserves are equivalent to two-thirds of the ordinary capital. The Contingency Reserve, D13 although it appears on the face of the Balance Sheet for the firsttime, is, in fact, a product of reserves and provisions made in past years. The rise in fixed assets is due in large measure to the acquisi-tion to which I have referred of Crown plant already in use in our works, but this is not to say that we have not also been addingnew plant to our existing resources. New plant and equipment to the value of £140,000 was added during the year, and furtheradditions have been arranged for 1949, nearly all to maintain and improve the capacity of the Company to meet modern designrequirements. Examples include an extensive reorganisation of our engine test plant to provide for high-powered piston enginesand for more powerful gas turbines; new research capacity, especially in the Aircraft Division, and new machine tools andother specialised shop equipment. Stocks and work in progress are higher this year by £505,669—due partly to increased costs both of labour and materials, partly to increased volume of orders on hand, and partly also to reducedprogress payments. Despite the demands on our resources it is satisfactory that,the combined total of tax reserve certificates and cash is only £525,864 less than a year ago, and that at the same time theprovision for outstanding liability to tax is lower by £392,670. In short, our net current assets at £4,726,432 are virtuallythe same as last year, showing a slight increase of £18,767 over the 1947 figure—a satisfactory position having regard to taxationand the extent to which we have been able to finance the increase in fixed assets out of the Company's own resources. CONSOLIDATED ACCOUNTS. .. ' I need not say much about the consolidated accounts. Fromthem you will see that our Housing Company—the subsidiary Company whose figures are consolidated with those of the ParentCompany—has made profits in previous years which have enabled a transfer of £150,000 to be made to General Reserve in itsaccounts. This transfer goes towards the building up of perma- nent capital for the Subsidiary Company's business—an invest-ment from which your Board consider that the Parent Company can look forward to a useful return later on. ARTICLES OF ASSOCIATION. The Companies Act, 1948, in addition to changes in methodsof presentation of the Accounts, has in many cases necessitated extensive changes in Articles of Association. In the case of yourCompany some alterations will be required. These are under consideration and we shall probably find it convenient to submitthem to the stockholders at a later date, in which case due notice will be given in the usual way. ACTIVITIES OF THE COMPANY. It has been my practice year by year to give to stockholdersand others interested in our affairs a survey of the Company's current activities. The year 1948 was one of consolidation aswell as of new developments. .,•„ _ :,... AIRCRAFT DIVISION. In the Aircraft Division we continued deliveries of Brigandaircraft to the Royal Air Force and of Freighters to a wide range of customers. Foreign exchange difficulties have limited oursales in several markets for which our products are well suited, but the possibilities of freight aircraft in many parts of the worldcontinue to develop steadily and it is evidence of our wisdom that a number of other constructors, in the U.S.A. and Franceas well as in this country, are taking more and more interest in the design of freight aircraft. Our Helicopter developmenthas proceeded, and we recently received the civil Certificate of Airworthiness for our Mark I Helicopter—the first C. of A. tobe awarded to a helicopter of British design. Sales prospects of helicopters depend first upon proved reliability, which we havenow gone far to establish, and thereafter on the study and exploitation of the special uses for which the helicopter is uniquelysuitable. No reference to the activities of the Aircraft Division iscomplete without a mention of the Brabazon. As a result of more than four years work the prototype should make its firstflight shortly. We are all looking forward eagerly to this outstand- ing occasion.
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