The Film Renter and Moving Picture News (Apr-Jun 1922)

46 THE FILM RENTER & MOVING PICTURE NEWS. PROVINCIAL April 29, 1922. CINEMATOGRAPH THEATRES, LTD. Lord Ashfield dwells on contributory causes of present drop in Company’s earnings—-But strikes an optimistic note as to the future. SHERE was a large attendance of sharcholders at the twelfth annual ordinary general meeting of Provincial Cincmatograph Theatre, Ltd., at the Holborn Restaurant o1 Lord Ashfield, P.C., presided. The Chairman, in the course of his speech, ino moving the Tuesday. adoption of the report and balance sheet, said : There has been no change during the last year in the issued capital of your company, but the amount of mortgages with the accrued interest has increased from £317,000, in round figures, to £534,000, or by £217,000. As against this, the investinents show an increase of £107,000, mainly attributable to further holdings in Associated Provincial Picture Houses, Ltd., and Albany Ward Theatres, Ltd., and the expenditure in properties, buildings, and equipment shows an increase of £224,000, mainly attributable to the completion of the Regent Theatre, Brighton, so that altogether £331,000 has been spent. the cash positicn has nultered. At the close of the preceding year the cash resources available were £77,529, while for the year under review they are given as £15,226 only, but as there is an overdraft with your bankers of £27,860, there is really a deficieney of £12,684. aioking the total change in this item for the seu of £80,163. The Trading Profit. With the £26,000 whieh fois propesed to carry to the depreciation reserve this fund now stands at £193,000. The general reserve is stationary at £45,000. On the other hand, goodwill at £25,600, and the expenses attaching to the issue of new capital in W920 at £RE0CO also remain unaltered. Your directors have net feit justified in dealing with these items so long us the company holds several important sites undeveloped. The cost of holding these sites has continued to be met out of current revenue. The value of these sites stands on the books at £458,600. and represents ao cousiderable investment which for the moment is sterilized. It is a matter of regret that the financial situation and the cost of building do not permit of a forward policy in the turning of these sites to profitable use. Th vou will then from the balance sheet te the pr fit and lass account vou will observe that the trading profit fer the year, including from investments, amounted to £100,780, compared with £224,913 a vear aco, or a decline of £124,133. To the trading profit fer the vear must be added the balance brought forward from the previous vear of £36,658, 60 that £187 438 is available for distribution, income This has been dealt with as follows : £26,000 has been carried to depreciation reserve, or £1,000 more than the amount earried to this account a year ago. The full dividend to January 81, 1922, of 74 per cent. on the AT Prefer. ence Shares amounting to £7,509 has heen paid and acerued. A dividend of 74 per cent. on the “Bo Preference Shares for nine qnonths of the financial vear to November J last amounting to £58,750 has also been paid. Lastly. a dividend of 10 per cent. on the Cumulative Participating Preferred Ordinary Shares for the first five montis of the financial vear under review, amount. ing to £46.67 has been paid. When these payments are made Google In consequence of this expenditure * there is a balance of £28,521, or a sum less by £8,137 than the sum brought: in. Contributory Causes. T want now to go behind all these figures out of the published tceounts and to show to you these factors which have contributed to cause this unfortunate result. First of all, there is the depression in trade and industry. It would have been extraordinary if this had not had a marked effect upon the takings of the picture theatres. Making adjustments for theatres which were not continuously open during the last two financial sears, I find that the takinus have declined by .£81,000. When Trecellect that many of vour theatres are situated in industrial centres, and that the number of unemployed has reached two inillious, or 16 per cent. of the workers of the country, and when LT recollect the number ciployed culy part time, Tam somewhat startled at the moderateness of the decline. More than a quarter of the population must during a large part of the last year have heen deprived by a diminished livelihood of a chance of amusement. It searcely seems necessary, therefore, to refer to other causes, such as the prolonged coal dispute and the brilliant rainless summer, which must have helped towards the result. Excluding ligensed restuurants, there was a reduetion in’ the tikings cf the cafés attached to your theatres amounting to £23,000, Owing fo savings in expenditure upon which the staff is to be consratulated, the falling off is more than offset, and Poa happy to inform: vou that the returm on your cafés: is areater by about £4,000 than that of the preeedine vear, Extravagant Cost of Films. Second, there is the extravacintly enhanced cost of films. The inercase under this head is £85.000, and if it had not been for ceonomies in other directions amonnting to £43,000, the position would have been even worse, Tt is difheult to sav whether all of these economies are really wise. It secured reasonable and proper for the management to try them, but ina business 6uch as vours, Where soomuch depends upon the mitintenanee of an attractive and acceptable appesrance, economies soon reach a point at which they may be more diumfol in reducing revenue than gainful in reducing expenditure, It aay, therefore, be that some of this expenditure mist be renewed, and Toonly eal Sour attention fo it te show that the Bosrd are not forgetful ef the real interests of the sharcholders. The third factor is the Entertainment Tax. During the year under review your company collected from: their patrons for the Government under this head astm equivalent to more than twice the net. profit carpe, Tne fact, at some theatres the Entertainment Tax is much more then the gross surplus remaining after: paving the running costs. This is to say that the theatres which vou own were run more for the benefit of the Goverment, who had no interest or investment ino them, than for the benefit. of the The incidence of the Entertainment Tax has from the first been a eenuine crievance to the kinematograph trade, and it is deplorable that no redress has so fia been secured, When empioyiment was good and money plentiful the burden of this tax was not grievous, proprietors. Now, when wages and incomes are