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Public meetings of the Burntisland Oil Co. Ltd

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up 1888

BURNTISLAND OIL COMPANY

The seventh annual general meeting of the Burntisland Oil Company (Limited) was held yesterday afternoon in the registered office of the company, 15 Hanover Street, Edinburgh – Mr Wm. N. Gillies presiding.

The CHAIRMAN, in moving the adoption of the report, which had already appeared in the Herald, said the directors very much regretted that the report was not so favourable as in recent years. For the first time in the company's history they were unable to declare a dividend. He proceeded to speak of the causes of this state of matters, including the crisis in the trade, keen competitors, low prices, and the miners' strike. The loss to the men employed by all the companies by that strike was estimated at £65,000. When he stated that the production of the Burntisland Company was by that strike lowered about 30 per cent, they could see how great was the loss to the company. The benefits expected from the newly completed railway at Kinghorn were completely nullified by the strike. Another principle cause for the deficiency shown in the balance-sheet was the fall in the value of the stocks held by the company, more particularly in paraffin scale. As the prices for products generally were now so low, it was very unlikely that any loss from this cause would occur during the current year – not to speak of the arrangement among the companies by which minimum prices were to be maintained. The Chairman next spoke of the £100,000 of debentures which had been offered, and for which the shareholders did not apply to any great extent. He detailed the arrangements which had been given in the report, by which the directors and their friends had subscribed for a large proportion, and for the balance not applied for to be taken up. He referred to the arrangement between the companies and the Standard Oil Company of New York fixing minimum prices, and said he thought the companies had acted wisely in fixing the minimum prices so low that they could not adversely affect consumption. With respect to the oil-works and mines, he was glad to be able to state that these were satisfactory condition. The works were putting through the daily quantity of shale with which it was originally intended they were to deal. The mines were in good order, and were supplying without difficulty the necessary amount of shale for the retorts. The directors were now so satisfied with the extent of shale in the company's own mineral field, and in those they had leased, that at present they considered any further outlay in this direction unnecessary. The capital expended during the year was considerable, amounting to £17,132. This amount, however, they directors had been able to reduce to £6632 by writing off £10,500, the amount of premium on the last issue of new shares. This would make the total amount written off capital expenditure for depreciation in five years and five months, £55,562 or equal to 11 per cent, per annum. During the same period the company had paid in dividends to its shareholders £87,769. These two sums together amounted to £143,331, the paid-up capital of the company amounting to £144,500. The candle works were now in full operation, and in first rate order. They had cost a considerable sum of money, but he was not aware that there was a better constructed or better appointed candle work in the country. They had secured the very best agents obtainable in London, Manchester, Dublin and Belfast, and they had found no great difficulty in disposing of their make of candles, which had already taken their place alongside makes of much older standing. He concluded by speaking of the great loss the company had sustained by the death of the late chairman, Mr John Waddell of Inch.

Mr DAVID TODD, Glasgow, said he objected to the adoption of the report, which he described as a piece of romance of a tragic character financially. It was not honest.

The CHAIRMAN interrupted, on the ground that his motion had not been seconded, and some altercation arose owing to Mr Todd refusing to sit down. This, however, he ultimately did, and Mr ROBERT YOUNGER, Edinburgh, seconded the motion for the adoption report.

Mr RODD moved that the report be not adopted, but failed to find a seconder.

Mr J.D. WALKER, Edinburgh, asked a number of questions. He did not think the chairman had fully elucidated some points which had been discussed outside. He thought it was a pity the oil companies of Scotland did not issue profit and loss accounts as well as balance sheets. He pointed to the great contrast between the results now shown and the results the company had formerly reached. The loss of £10,000 was further aggravated by there being no allowance made for depreciation. He asked on what terms the special loan had been under-written. Did the debt of £36,000 due to the bank include a loan of £5000 which it had been stated was guaranteed by the directors, and did it include the loan of £12,000 advanced by the bank to the directors? Why had the directors not deducted from the account the value of the shale raised to 31st March? He also asked several questions as to the coat of the candle-work and railway, and of the agencies in London and elsewhere.

The CHAIRMAN said that Mr Walker was a partner of the firm of Walker & Watson, stock-brokers, and he proceeded to quote figures in reference to the company from a circular issued by that firm. He compared these figures with the statistics taken from the accounts in order to show that Mr Walker's figures were erroneous to the extent of about one-third of the capital of the company. In regard to a profit and loss account, he thought limited companies often gave too much information to their shareholders. He believed, however, that the accounts were prepared in a similar way to those of other companies. As to depreciation, it was true that they had not written off anything for it this year, but he pointed to the large sums that had already been written off in that way. Regarding the conditions of the debenture issue, the directors, their friends, and some of the shareholders subscribed about £50,000. They had to pay the mortgage on the estate of the company and the calls on share loans, and it was absolutely necessary that the money should be got. He was not prepared to tell them of the terms and conditions but he might say that the financial people who had agreed to take up the remainder of the debentures could be called upon by giving them 14 days' notice to do so. They would take up whatever sum remained after the 6th September, up to which date the shareholders could still subscribe. Therefore, he said, they had to pay something for their advantage. But the whole thing would not cost so much as 7 per cent. (Applause.) As to the scale of Kinghorn, he did not believe that they had a hundred tons, an amount which was not necessary to carry on the candle works. He proceeded to speak of the railway, and held that it had been very cheaply made by the Messrs Waddell under their late chairman's own superintendence. He was not prepared to say how much the agencies in London and elsewhere cost, but he might say they would bear favourable comparison with the agencies of any of the other companies.

Mr McGREGOR, Southport, complained of the defective nature of the report as not giving sufficient financial details. Regarding the debentures, he thought the shareholders had not been allowed a sufficient opportunity to subscribe for them. A number of other questions having been asked.

The CHAIRMAN, on the invitation of Mr McGregor, indicated the prospects of the company for the future. He considered that the oil trade generally must revive. He pointed to the fact that Russian oil produced only about 30 per cent. of burning oil, and taking this into account along with the cost of carriage and the absence of bye products, he thought that the Scottish oil trade need not have any fear of this Russian competition. The company had a good mineral field, and if the business was well conducted and only moderately profitable they would do very well indeed.

Major WILD moved that a committee of shareholders should be appointed to make inquiry into the state of the company, and to confer with the directors. The motion failed to find a seconder, and accordingly lapsed.

The report was adopted, and Mr George Waddell was appointed a director. The auditors were re-elected, and a vote of thanks to the Chairman closed the meeting.

Glasgow Herald, 6th June 1888

up 1891

BURNTISLAND OIL COMPANY

The annual meeting of the shareholders of this company was held yesterday in the offices, Hanover Street, Edinburgh.  Mr Wm. D. Gillies, chairman of the company presided.

The CHAIRMAN, in moving the adoption of the report, which has already been published, and which proposed the disposal of a profit of £13,400 in payment of interest as debentures, losses &c., and in reducing the debit at profit and loss, said – When I had the pleasure of addressing you at our annual meeting on 6th June last year I expressed the opinion, then fully endorsed by my colleagues, that the company, after passing through two or three years of severe trial and depression, had at last turned the corner, and might be expected to again resume a period, if not of its former, at least of moderate prosperity. Notwithstanding, the results of last year's trading, which, although unfavourable on the whole, are certainly an improvement on the previous year, we still adhere to this opinion. The causes of our failure to realise the expectation formed at this time last year are glanced at in the report, and it could scarcely have been then anticipated that increased prices for fuel and other material, advances in wages of workmen, and consequent irregular working of the miners, as well as a protracted and disastrous railway strike, could together have combined to overturn the more favourable opinion which we held regarding the prospects of the company for the financial year now under review.  But such has undoubtedly been the case. We have paid in increased wages alone £5113 10s 8d over the previous year, about £3660 more for coal and chemicals, £665 for timber, in all £8827 13s 11d, or an average increase of 12.77 per cent. This is a very serious item in a business of the character and dimensions carried on by your company. I cannot help thinking it would be well if the workmen, when pressing their demands for increased wages, would try to remember that an industry can only be carried on so long as it continues to pay a reasonable return to those who have embarked their money in it, and that sooner or later, if such return is not forthcoming, it must cease to exist. Demands for increase of wages are often pressed by the workmen without accurate knowledge on their part of the conditions under which the industry in which they are engaged is carried on, and I cannot help saying that they should not forget that capital has its rights as well as labour, and that the benefits derived from working any particular industry cannot all go to only one of the interested parties.  You will perhaps remember that I stated last year at our meeting that I expected our increased profits would foot up £100,000.  Well, the actual increase has been £3019 8s 10s, or an average increase of 10.87 per cent.  This sum, you will notice, has been rather more than wiped out by the increased costs above referred to. The directors have exercised the most rigid economy in the matter of charges, agencies, and expenses of all kinds, and these have been reduced to the extent of about £1008 for the year, and we hope to effect some further economies during the current year. Debenture bonds have been retired to the extent of £13,640 up to the 1st April 1891.  £3910 have been re-issued, and a balance of £7730 is held by the directors in security for loans advanced to the company. The directors think it would be helpful to the company if the shareholders would come forward and take up these bonds, which bear a good rate of interest – namely, 6 per cent, and which they think are perfectly good securities.  Bad debts amount to £182 8s 1d, or at the rate of 13 per cent, or 6 per cent less than those of last year.  Had it not been for a certain bad debt in the candle department the losses from this source would have been only £14. In capital expenditure, the sum expended being very moderate, £3016 9s 7d, fully half of this amount on a new refrigerator, which has brought up our yield of paraffin scale to about 16 per cent, the highest yield we have ever obtained.  For the upkeep of plant £5008 has been expended last year, against £4064 for the previous year, which has all been charged to revenue. I am very pleased to be able to state that the candle department of the company's business continues to be satisfactory, and that a profit has been earned for the year ending March last, against a considerable loss of £900 for the previous year. The company's candles are now becoming favourably known in the trade, and I have not the slightest doubt but that our business in candles will continue to expand both in volume and profitableness. With regard to our prospects for the current year, I can only say that our coal contracts so far are made at a less price than these of last year for the same period.  Vitriol is also contracted for over the whole year at a considerable reduction in price, while caustic soda and timber are much about last year's prices.  Paraffin scale has, as you are aware, been advanced 7/16d per lb., and this should yield to the company taking last year's through put, an additional £9000, while it is hardly to be expected that wages or material can in any way be increased.  Indeed I look for a considerable reduction in these items as the year progresses.  The prospects of general trade are none of the brightest, but this will not be an unmixed evil to the oil companies in Scotland, which depend so much for their success upon cheap material and moderate wages to workmen.  In conclusion, I would like to emphasise the fact that the oil companies continue to work together very harmoniously under the Oil Association agreements, with great advantages to themselves, and it is hoped that greater benefits will accrue to them in the near future under these agreements, which, we hope, will soon include Scotch, American, and Russian burnings oils, which every one in the trade knows are being sold at much too much a low price.  Our mines are in a better position for putting out a large supply of shale than they have ever been, and could we only depend upon our miners working in a steady and fairly reasonable way the results for the current year would be much more favourable than they have been for the last two or three.  Williamson, Tweedie & Robertson's report for last year stated that the mines belonging to the company were in first-class order, and that there was shale sufficient for an output of 150,000 tons per annum for the next 25 years' irrespective of the shale in the properties leased by the company, and this report applies with equal truth at the present moment.  He was sorry there was no dividend for the shareholders, but he had by no means lost faith in the future of the company if they could only get their workmen to give them a proper output of shale.

Mr GEORGE WADDELL seconded the motion.

Mr ROBERT YOUNG, sen., said he noticed the directors had not been able to write off anything during the year, but he considered that on the whole the report was very satisfactory. It was perhaps less than some of them expected, but they all knew the circumstances under which the company laboured.  They owed a deep debt of gratitude to the directors, who had not for the last three years charged anything for their directorial work.

The CHAIRMAN, replying to questions, said it was not so much that the men did not work as that they did not go down into the pits regularly.  The company would have made a very good show if the men had only given them a proper output of shale.  They had plenty of shale, the works were in capital order, and he certainly thought they should have had £10,000 more than they had had.  The miners were paid by the ton.  Henderson retorts were in use, and were considered by the manager to be best suited to that class of shale.  They produced 16 per cent. of paraffin against a smaller proportion obtained by any other company.  The only thing they might get more of was ammonia.  But the matter was being looked into, and if it should turn out that another class of retort would suit them better there was no reason, except monetary, that they should not be erected.

Mr George Waddell was re-elected a director of the company.

The CHAIRMAN afterwards stated that the company, spite of the large sums it annually spent in wages and taxes in Burntisland and Kinghorn, found themselves being thwarted by these Corporations, which, for example, were trying to deprive them of their water rights. The directors had tried to be conciliatory, but he wished to make the intimation that they did not intend to abate one jot or tissle of their rights to any burgh, however ancient it might be.  They had large interests in that district, and intended to protect them. 

A vote of thanks having been awarded to the chairman, the proceedings terminated.

Glasgow Herald, 9th June 1891

 

 

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