THE BROXBURN OIL COMPANY (LIMITED). A report has been issued by the directors of the Broxburn Mineral Oil Company in regard to the issue of new stock to meet the outlay arising in connection with the purchase of the Benhar Company's oil works.
After detailing the circumstances which led to the acquisition of the works, the report says;-The purchase price of the works, including cancellation of the shale contract with the Benhar Company, was £40,000; and for oil in stock and stores, £6000-together, £46,000. The company's previous works are capable of distilling and refining fully 400 tons of shale per day, while the above addition will increase their capability by 200 tons per day. This increase will, of course, require more capital. In order to put the works thus recently acquired on the same efficient footing as the works at Broxburn, and to enable the like profits to be derived, it will probably be necessary to erect new retorts similar to those now in use at Broxburn. New stock tanks and a new freezing machine will also have to be got. The total requirements in connection with the purchase are thus:-Purchase price, £40,000; new retorts (if necessary), £ 10,000; freezing machine, &c., £3000; for stock and book .debts, £7000-in all, £60,000.
Your directors have given their careful consideration to the best method of providing this sum. Two courses were open to them - viz., either to borrow the money, or increase the capital. Believing that all plant expenditure should be provided by capital, and as the company would thus obtain a direct gain, which would not be the case if debentures were issued, they have decided to recommend the latter course. The present capital of the company consists of 16,500 shares of £10 each. Of these, 4500 are fully paid up, £45,000; 2000 are deferred fully paid, £20,000; 10,000 are £8 10s paid, £85,000 - in all, £150,000.
Your directors would now recommend the shareholders to increase the capital to 20,000 shares of £10 each, by the issue of 3500 additional ordinary shares (£8 10s paid,, at the price of £15 per share, to be offered in the first instance to the holders of the existing ordinary shares, which gives them an advantage of a considerable premium on the present market value of the stock. This would only add £29,750 to the existing capital, but would yield £52,500, thus giving a direct gain to the company of £22,750. Should this scheme meet with the approval of the shareholders, and be adopted, the working capacity of the company will be increased by about one-half, while only one-fifth will have been added to the capital. Your directors will take up their full proportion of these shares, and an additional number should such be obtainable. In addition to the usual sum written off annually for depreciation, they recommend that the whole profit derived from the sale of the above shares, amounting to £22,750, should be placed to the credit of plant accounts, and thus reduce the capital expenditure on plant.
Glasgow Herald, 14th September 1880
1882 Annual General Meeting
BROXBURN OIL COMPANY. The fifth annual general meeting of the shareholders of the Broxburn Oil Company (Limited) was held yesterday in the offices of the company, Exchange Square- Councillor James Steel, Edinburgh, presiding. Mr. John N. King (secretary) having read the notice calling the meeting, the report by the directors, which has already been published, was held as read.
The Chairman afterwards said - In moving the adoption of the report, I am happy to congratulate the shareholders upon, the continued prosperity of this company. The result of the year's working has been very satisfactory indeed, and leads us to hope that the future of the company will be equally prosperous. The history of the oil trade has been one of serious fluctuations, but I may mention that the fluctuations once we started at Broxburn have all been in the one direction, and that of a downward tendency. The prices realised this year for all our products, with the exception of sulphate of ammonia, which was 25s per ton higher, have been the lowest I believe ever known in the trade. The report, which has already been circulated, gives you so much information that, with your permission, I will only add few remarks thereto. Of course you are aware that we have to pay dividend upon an increased capital this year, but I am happy to say that the increase required has been met by the large quantity manufactured, and also by a decrease in the cost of production. Improvements are being adopted at our works that will further tend in this direction. The net profit for the year, as you will see from the report, has been £48,912, sufficient to pay a dividend of 25 per cent, and to carry forward to our reserve the handsome sum of £995 4s ld, thus making 84 per cent paid to the original holders. 'The depreciation written off this year is also the very handsome sum of £30,611 12s., got from the sale of the 750 deferred shares, and our usual depreciation of 7 per cent upon the whole capital expenditure of the company, making £75,579 since the formation of the company.
Our stock-in- trade is larger than on any former year. I may explain, however, that this is the natural result of a larger work. We require to keep a larger stock of shale in the byng (sic), there is a greater amount of oil in process of manufacture; and added to that is our increased stock of wax and candles, which the necessities of the trade require us to have always on hand. These stocks have been taken I upon the same principle as hitherto; and this year, having an unusually large stock of burning oil, which has always been sold at less than manufacturing cost, we consider it our duty to reduce it to the market price of the day, and we have t been very careful not to carry forward anything that could be a possible burden upon the succeeding year. The capital expenditure is greater than we anticipated twelve months ago, part of which could not be foreseen, but is during the summer the directors considered it, advisable to enlarge the Broxburn refinery we as to manufacture the whole of the crude oil made by the company, and also to increase their wax and candle factory, so as to manufacture all the scales into wax and candles. We foresaw that an increased profit could be made this source and, besides, we have now a large staff of agencies all over the country, and these extensions will enable us to take greater advantage of their services. By referring to the first paragraph of the statement showing the company's operations, you will observe the position of our capital expenditure, and I point to it with considerable satisfaction, as you will see that two years ago our expenditure was £156,000, and our working capacity about 4,000,000 per annum. Now our capital expenditure is £194,000, and our working capacity is over 8,000,00 gallons or, putting it another way, two years ago our total capital expenditure was equal to £939,000 per I million gallons of crude per annum and this year, after deducting £16,000 as the value of our wax and candle factory, it is £22,250 and, besides this, we have the refinery at Benhar doing nothing at the present moment, and which will be available should an increase in our operations be considered desirable.
These figures show the very satisfactory state of the company, and must be gratifying to you as they undoubtedly are to the board. Mr Kennedy has brought in a map showing the extent of the shalefield leased by this company, the property of Lord Cardross. It is rather a small scale, being six inches to the mile, but I may state that the extreme a distance from east to west is about three miles, and from north to south about the same, and the total area is something like five square miles. The portion marked red is what has already been worked, and only by the company, but what has been worked at Broxburn during the last twenty-two years, and is only about a twelfth part of our area. Last year we spent over £500 in boring to prove a portion of the field, and within a very limited area round our present workings it has been calculated by an engineer that there is sufficient to give a supply of 100 tons a day for the next ten or twelve years to come. It is known that, in addition to this, there is shale in nearly every portion or the field. Some of it, however, is very deep, and may not be so easily wrought; but we also know that in the south of our field and in the west we have a large and virgin field of moderate depth to start upon when necessity requires. It is only but fair that you should have a knowledge of the abundance of our shale supply. (Applause.) Mr Hurll seconded the motion for the adoption of the report, which was unanimously agreed to, the dividend declared being at the rate of 25 per cent, per annum. Mr Hoggan proposed that Mr Hurll and Mr Kennedy be re-elected directors of the company, and in doing so remarked that any shareholder who visited the works must be satisfied that they had the right men in the right place. (Applause.) Mr Robert Robertson seconded the motion, which was unanimously agreed to. Mr Bell proposed that Mr. Wyllie Guild be reappointed auditor of the company, and that he should be paid the sum of £100 for his services.
The motion having been confirmed unanimously, Mr Guild thanked the shareholders, and went on to say - As this company has now had an existence of over four years, and has paid for three of them a steady dividend of 25 per cent, I have thought it might be interesting for the shareholders to learn in how far the expectations held out at the commencement of the company have been realised, and from what causes the results may hare fallen short of any estimates made at the origin of the company. The prospectus of the company, in the preparation of which I had the honour to act professionally, was issued in October, 1877, and held out the prospect that the works then proposed would be capable of manufacturing 4,000,000. gallons of oil per annum, and it states that "if the average price of oils for the past eight years be maintained, there is every reason to expect that a large dividend on the proposed capital of £163,000 to be realised." That statement was not made without the most careful consideration and examination of all the detailed calculations upon which it was based. The production of 4,000,000 gallons of crude oil was estimated to yield the following product:- Burning oil 45 per cent, Lubricating oil 12 per cent, Scale 8 per cent, Loss? 35 percent, the prices of these products being at that time respectively 7d per gallon, 10d per gallon, 28d per gall or 3.5d per pound. On the basis of that data the net profit was estimated crude oil, 3.25d and refining 2d per gallon. These were the estimates based upon the prices then prevailing. A similar statement was proposed as to what the results would be were the average prices of the eight previous years realised, and these had been burning oil, 11d per gallon; lubricating oil, 11d per gallon, scale, 30d per gallon- the estimated profit on that data applied to the same capital being £57,812 or equal to exactly 35 per cent. So far as my professional experience enables me to judge, I cannot conceive a more healthy or sound concern; and so long as the present intelligent and judicious management is continued, both in the practical details at the works and the energy and ability in the counting-house, I see no reason to fear any lessening of the prosperity of the Broxburn Oil Company. (Applause) The motion of Mr Howie, a cordial vote of thanks was passed to the chairman, to Mr Kennedy, and to Mr Henderson, and a similar compliment having been paid to the chairman for presiding, the meeting separated.
The Glasgow Herald, 18th May 1882
1884 Annual General Meeting
THE BROXBURN OIL COMPANY. The annual meeting of the Broxburn Oil Company was held yesterday in the offices of the company, Royal Exchange Square. Councillor Stott, Edinburgh, the chairman of the company, presided. Mr KENNEDY, the managing director, submitted the report and balance sheet. He further explained that the working was conducted in departments, so that the profit and loss on each department was clearly shown every year. In. comparing the prices realised for products for the past and previous year, he found that lubricating oil showed a loss of £4384 is 9d, and ammonia a loss of £925 12s 7d, making a total of £10,309 14s 4d. On the other hand there was an increase on the price realised for burning oil amounting to £8110 19s 4d, and for paraffin scale, wax, and candles, £15,572 4s 6d - making together £23.683 3s 10d, showing a net gain for the year of £13,373 9s 6d, The charges in the trade, which included all office charges, salaries, agencies, directors' fees, &c. were equal to 3.48 percent; bad debts mounted as stated, to £471 9s 7s 10d, equal to 0.15 per cent, or 3s for every £100. Taking the average of their bad debts since they commenced business, the whole amount was equal to 6s 6d per £100 upon the value of the goods sold. The chairman, in moving the adoption of the report, said- As you are aware the gross profit for the year amounts to £68,962 6s, by far the largest it profit that have been made in any year since the formation of the company.
The directors might have recommended a larger dividend, but they considered it more judicious and advisable to husband their resources, and, so far as in their power, keep the present satisfactory dividend a steady one. They therefore recommend that the same dividend be paid as formerly, at the rate of 25 per cent, absorbing of the gross profits £44,937 10s; that £17,402 14s 6d be written off for depreciation; that £3000 be added to the reserve fund; and that a the balance of £3622 is to be carried forward to the current year, thus disposing of the amount; £68,962 2 s. In addition to the above sum, the directors paid out of the profits of the past year the sum of £2500 as a bonus to the principal officials of the company. When this bonus was proposed at the last annual meeting the directors heartily concurred in the recommendation, as it was entirely in accordance with their own views. I am sure you will agree with me in thinking that the bonus was well earned. In Mr Kennedy we have all that we could desire as an administrator, and in Mr Henderson we have a works manager and engineer certainly not excelled in the trade, and we cannot too fully record our appreciation of the great care and ability which they have so sedulously devoted to the interests of the company. I have very great pleasure, indeed, in acknowledging, on behalf of the board, and I venture to think of the individual shareholders, the services of these gentlemen particularly, and also of all the other officials and agents, in assisting to bring the company into its present prosperous position.
As to the capital expenditure for the past year, I think the only matter calling for special remark is in the mining department. Two years ago we arranged to sink two pits to enable us to cope more advantageously with water found in the workings. One of these pits has been completed and started. In the other, however, we met with somewhat serious difficulties in the metals and water, and consequently the expenditure has been larger than we at first anticipated. In considering whether we should utilise the refinery at Benhar we found that in order to make these works anything like perfect, a considerable expenditure would have to be incurred. The plant on the ground was of a most inferior description. There was no shale in the immediate neighbourhood, and. further, there was no supply of good water, which is essential for profitable manufacture. We were therefore thoroughly satisfied that any extension could be more advantageously carried out at Broxburn, where we have abundance of shale, and we accordingly decided to sell the refinery on the first favourable opportunity. - The price realised is certainly not a large one, but to have dismantled the works would not have yielded us half the amount we received, and in selling them we have, in addition to the price, freed ourselves of a heavy liability for rent.
As I stated in my remarks last year, we have always had the idea of erecting vitriol works for our own supplies. When, therefore, we saw our way to make an alteration on the capital we did not hesitate to sanction the erection of these works, which are expected to be in operation in - the course of the next two months, and it from which a very large saving is anticipated. In regarding our future operations, the report refers to three different objects- viz, the increase of the the works, the increase of capital, and the conversion of the fully paid-up shares into shares of £10 each - £8 l0s paid. With regard to the first, in order to overtake an increased output of 200 tons of shale per day we will require to expend about £52,000, the greater portion of which will be spent during the present year, as the whole additions to the refinery will be made at once. We purpose erecting 102 Henderson retorts this year, leaving a number to be built in the following year. Besides completing the vitriol works we will add considerably to our house accommodation during the present and next year.
In order to accomplish this extension of the works, and also for the conversion of the fully paid - paid shares, to which I shall presently advert, it is necessary to increase the capital of the company, and we accordingly recommend that this should be increased by creating 3500 shares of £10 each (£8 l0s paid). Of these shares, 2350 will be offered to the present shareholders at the price of £22, which will yield about £52,000, the sum needed for the extension of the works, and the balance of 1160 shares will be required for the conversion of the fully paid-up shares. By this scheme we only add £20,000 to the present paid-up capital of the company; and you cannot fail to observe that, while we are adding a fourth to our working power, we are only adding a ninth to our paid-up capital. Should our profits happily continue on the same ratio in the future, this extension will be an immense advantage to the company. It may perhaps be said that it would have been better to have borrowed the money required for the extension than create new capital, as by offering the new shares at £22 we are giving the holders of s these shares interest at the rate of 10 per cent so long as we continue to pay 25 per cent. This is quite true, but, on the other hand, there will be a profit of nearly £32,000 upon the sale of these shares. This sum will be placed to the credit of plant accounts, and will thereby save us writing off depreciation at 7 per cent on that amount in all future years, so that in reality the scheme is equivalent to borrowing the money at about 5 per cent besides placing the company in a much stronger position. The proposal to convert the fully paid-up shares into shares of the same nominal value, £8 10s paid, was made by us at the request of several holders of these shares. Hitherto, with £1 l0s being uncalled on the Ordinary shares, the fully paid up shares never reached their proper market value, As I have already mentioned, 1150 of the new shares to be created will be absorbed in effecting this conversion, and by carrying it out there will be no t alteration made on the paid-up capital of the company, while the uncalled capital will be increased by £10,000. The directors have recommended that borrowing powers be conferred upon them for £50,000. At certain seasons of the year, the value of our stock-in-trade is no less than £100,000. With all our capital spent upon works, you cannot fail to observe that we required a working capital, and that money had to be found for this purpose. Hitherto the directors have come under personal obligation for this, but they now think that when they are proposing an alteration in the capital of the company they are justified in taking advantage of the opportunity of putting this matter upon a proper footing.
Before I sit down I would be failing in my duty were I not to congratulate the shareholders upon the very valuable property which they hold. Of course, we cannot shut our eyes to the fact that many new companies are being started, which will lead to considerable competition both in selling our products, and also in the labour market. But I have no fear for the future. Although we have to look forward to increased competition and decrease in value of some of our products, there are other articles we manufacture which are increasing in value, and with our additional production we are quite hopeful that the dividends of the past will be continued in the future. Bailie Richmond, in seconding the motion, ex pressed satisfaction that the directors had taken up the suggestion he had the temerity to make at last meeting, and had paid a bonus to the principal officials of the company. He thought it had been well-earned, and after receiving a dividend of 25 per cent for five years in succession the shareholders could afford it. He wished also to notice a special feature of this company, namely, that it did not seem to depend so much upon one particular product, as some companies did, so that if one was not doing well others might be doing extra well. The Broxburn Company was thus in a specially favourable position. He further expressed approval of the proposal to erect new vitriol works, and remarked that the creation of additional capital was perfectly good financing. The proposal was to add £20, 000 to the capital, for which they would actually receive £52,000; while with that £52,000 they would add to their outlay to an extent equal to that of many new companies were doing at a cost of £120,000 or £130,000 Then again, that the business could be carried on with trade charges amounting to only 3.25 per cent spoke volumes for the management; while the fact that the bad debts for the year reached only £470 showed that the greatest care and discrimination were exercised in that department.
The Chairman then moved that a dividend at the rate of 25 per cent per annum be declared on the stock of the company. Provost King, Hillhead, seconded the motion, which, like the other, was also carried. On the motion of Mr Hurll, seconded by Mr Bryce, the directors were authorised to borrow, for the purposes of the company to the extent of £50,000. Mr Fraser next moved that Mr Bell and Mr Weir be re-elected directors of the company. Mr Orr seconded, and this motion was also carried. -Mr Wyllie Guild was afterwards reappointed auditor of the company. An extraordinary meeting of the company was afterwards held for the purpose of authorising the issue of new shares, and the rearrangement of the stock of the company. Mr Stuart, the law agent of the company, read the resolutions carrying out the purposes in view. Their adoption was moved by the chairman, seconded by Mr Bell, and unanimously adopted. A vote of thanks was afterwards passed to the chairman, and the meeting separated.
Glasgow Herald, 22nd May 1884
1885 Annual General Meeting
BROXBURN OIL COMPANY. The annual meeting of shareholders of the Broxburn Oil Company was held yesterday afternoon in the company's offices, Exchange Square- Councillor Steel, of Edinburgh, presiding. The Chairman, in moving the adoption of the report- which has already been published - said the scheme for assimilating the different shares of the company was fully taken advantage of, and the additional 2350 new shares were all taken up. By the issue of the new shares the increase of capital upon which we have to pay dividend in the coming year is £20,000, but upon this issue the company received by way of a bonus the sum of £31,725. This sum the directors applied to the depreciation of the plant accounts, besides writing off £14505, the usual 7 per cent on the entire capital expenditure of the company, and £3079 for replacement of old vertical retorts, in all £50000. After disposing of the above sum there remains at the credit of profit and loss account, including the balance carried forward from the previous year, the sum of £52,998. We therefore recommend that the same dividend should be paid as formerly at the rate of 25 per cent, absorbing £44,945; that £5000 be placed to the credit of the reserve fund thereby increasing this fund to 22,000; and that the balance, £3052, be carried forward to the current year. The Chairman went on to refer to sums expended during the year in various departments, and to improvements introduced in the works, remarking that the saving in the cost of manufacture during the current year, from decreased cost and enhanced value of various products, is estimated at something like £30,000. I do not, however, wish you to go away with the notion that this sum of £30,000 will be all a direct gain to the company, because in the present year we have to face a very considerable decrease in the value of the products that have to be sold. No doubt you are aware there is a considerable fall in the value of ammonia, lubricating oil, and in paraffin scale and candles. These together will nearly absorb the benefits which we anticipate from the reduced cost of manufacture. It is, however, a pleasant thing to know that the company by these improvements are in a position to meet the fall in prices, and still maintain the position they have long occupied.
As stated in the last paragraph of the report, the company have secured the right to a lease or the Hopetoun shale field. At present it is being thoroughly bored and investigated, but from the abundance of shale seen at the different outcrops, it is quite evident that this field will be of great value and importance to the company in the future. Should the results of the boring prove to be satisfactory, and the directors resolve to take over the field, this will of course necessitate a very considerable extension of our present output, but with the improvements which can be introduced in the manufacture, and the low price at which works may now be erected, it is quite possible that the profit from this source will more than rival Broxburn itself. It has been my privilege in years past to congratulate the shareholders upon the valuable property which they hold. I can do so now- more than ever. With our capital expenditure written down from £372,032 to £215,413, we now have, when you take into account the expenditure upon the acid works and the wax and candle factory, a more nearly double the size of what we had four years ago; and although we only realised about one-half the profit per ton of shale distilled that we did in former years, we would still be able to maintain the dividend of the past.
Mr Hurll afterwards said- In seconding the adoption of the report, I may be permitted to make special reference to one paragraph in the report, namely, the one which deals with the acquisition of the Hopetoun shale field, because I know it will he interesting to the shareholders to learn how this field has been secured to the company. As stated in the report a trial lease of the field as secured by Mr Steel and Mr Kennedy, in their own name, and, on the completion of the missive, these gentlemen paid a large sum of money to Lord Hopetoun as a grassum. Their first anxiety was to get a lease of the field, and having secured this, a meeting of the board was thereupon held, at which there was produced a minute book detailing all the negotiations that bad taken place with Lord Hopeton's factor and themselves in connection with the completion of the missive, and also containing a copy of the missive itself. These having been read to the meeting, Mr Steel and Mr Kennedy offered to transfer their rights under the missive to the company, on the understanding that the company would relieve them of all the obligations undertaken by them to Lord Hopetoun, and, at the same time, adequately recognise their services in securing to the company a property likely to be of such value in the future. With regard to any remuneration to be given to them, it is but right that it should be known that they placed themselves unreservedly in the hands of the directors and shareholders; in offering the field, however, they frankly stated that while, in their opinion, it was desirable for the company to acquire it, they were themselves prepared to retain it provided the directors did not see their way to take over the missives. I should here mention that the proposal to lease this field was never under the consideration of the directors until the board meeting of which I am speaking, and that neither Mr Steel nor Mr Kennedy had any instructions to act on behalf of the company, so that in going into the matter they individually undertook rather heavy and important obligations to Lord Hopetoun. As explained by Mr Kennedy to the board meeting, the idea of looking out for a shale field originated with Mr Henderson and himself; and I should here mention that Mr Henderson is interested in this matter along with Mr Steel and Mr Kennedy, and that he will participate in whatever it may be the pleasure of the company to give. Being so long connected with the trade, Mr Kennedy and Mr Henderson thought that the time might come when, looking to their own interests in the future, it might he desirable to start business en their own account. On the other hand, having been associated with the Broxburn Company since its formation, and holding as they do a large interest in it, they were reluctant to sever a connection which had been the source of so much pleasure to themselves and satisfaction to the shareholders. All this was explained by Mr Kennedy to the directors, and we did not hesitate to accept the offer which had been so frankly put before us. We did so, in the first place, because we believed the field to be a good one, and likely to be of great value to the company, in the second place, if we did not do so it might lead to results unfavourable to the company, as the chances were that if we declined it a new company might be formed, which would bring with it considerable opposition. These are the reasons that induced us to accept the offer made to us, and I am confident they will recommend themselves to you as strongly as they did to us. With regard to the field itself, I have to state that, along with the company's engineer and Mr Kennedy, I went over it last week, and found no less than ten bores going on at the same time. It is yet, of course, too soon to get anything like a correct estimate of the quantity of shale which it contains, but from what we saw at the various outcrops, I have no doubt that it will turn out all that we anticipate, and prove a very valuable property. Samples of shale taken from different places have been tested in the laboratory with very satisfactory results, and at one place a sample taken from No. 7 bore showed a seam of' shale over 10 feet in thickness, which, when tested, gave exceedingly gratifying results.
Bailie Richmond thought the directors ought to have paid a bonus or a larger dividend at this time. He proposed as an amendment that the report be not adopted, but that the directors be asked to take it back and reconsider it, with instructions to pay to the shareholders a bonus for last, year of IG per cent., or at least of 5 per cent. Mr Hoggan seconded the amendment. After some conversation the amendment was withdrawn, and the report was adopted. Messrs John Hurll and Wm. Kennedy were afterwards re-elected directors of the company; and Mr J. Wyllie Guild was re-elected auditor. A vote of thanks to the chairman for presiding brought the proceedings to a close.
Glasgow Herald, 21st May 1885
1886 Annual General Meeting
BROXBURN OIL COMPANY. The annual meeting of the shareholders of the Broxburn Oil Company took place yesterday in the offices of the company, Royal Exchange Square -Councillor James Steel (Edinburgh), the chairman of the company, presiding. Mr Kennedy, the manager, submitted the report and balance-sheet, and stated that, in comparing the prices realised in the past year with those of the previous year, there was a reduction of values amounting to no lees than £35,644 12s 2d, made up as follows:- Paraffin scale and wax candles, £25,247 14s Ild; lubricating oil, £929 03s 6d ammonia, £2840 3s 7d -making a total of £37,385 2s 10d, but there had been a gain on burning oil of £3741 2s 10, leaving the net shrinkage at £33,644 16s 2d. The chairman in moving the adoption of the report, said they would observe from the first paragraph that in the past year they bad written off for depreciation and maintenance nearly £41,000. In the report submitted to, and approved of by. last general meeting the sum written off was £67,950, but of this sum £31,723 consisted of the premium received on the issue of new shares. Deducting this latter sum, as in a manner exceptional, they had a balance of £35,228 written off as depreciation, &c., for the year ending 1st April, 1885, as against £40,918 written off in the year that has just closed. Of this sum £51,078 was for depreciation on plant expenditure, and £4373 for the right to use Hodge's patent for the refining of paraffin, for the renewal of retorts, and for the expenditure in connection with the boring of the Hopetoun shale-field ; the remaining sum of £17,465 being applied for the maintenance of works. Some of the items might properly enough have been spread over a number of years, but the directors were of opinion that they should be wiped off at once. There remains at the credit of profit and loss account, including the balance of £3000 adds carried forward from the previous year, the sum of £37,040; the largest profit earned in any one year since the commencement of the company's operations. They proposed to dispose of this by paying a dividend, as formerly, at the rate of 25 per cent, thus absorbing £49,937; by adding to the reserve fund, which now amounts to £25000; and by carrying forward a balance of £4500 to next year.
It might be sufficient for him, -without going into details to say that this expenditure represented many additions and improvements on the works and other property, which were now in so perfect a condition that, with the exception of opening up some new mines in the ordinary course and the construction of the railway to Uphall, the directors did not anticipate that any great expenditure would be necessary during the current year. In his remarks last year he referred to the improvements that were introduce into the works and he mentioned that the directors estimated the savings from decreased cost of manufacture during the then current year at something like £30,000. He had great pleasure in saying that this sum had been more than realised, which was conclusive testimony that they had got the right men in the right place. The fact that the present fortunate position in which they found themselves was almost wholly due to these improvements must be exceedingly gratifying to the shareholders as it was to the directors, because these improvements were of the nature of permanent benefits. These to which he chiefly alluded were patented by Mr Henderson, and he was glad to be able to state that that, in addition to having the entire right to the use of these, had also acquired an interest in them, by which they would receive one-half of the royalties derivable there-from should they be adopted by other companies. The paragraph in the report as to the shale supply must be very assuring to the shareholders. Two estimates which they recently got - one from their consulting engineer, Mr James M'Creith, C.E., and the other from their resident engineer, Mr Angus fully bore out the statement in the report. Having, however, made an arrangement with Lord Cardross whereby the company might bring raw material from other fields to their works, the directors acquired from the Duke of Hamilton, a trial lease of the minerals in, the lands of Pardovan ; but, as I stated in the report, it was yet too early to say whether the results of the boring on that estate would justify them in concluding a formal lease. As to the Hopetoun shalefield, the ultimate results of the boring operations were disappointing in the extreme. At the date of last general meeting the indications were extremely favourable, and the directors were sanguine that the acquisition of the field would be highly advantageous to the company. The results, however, were eventually unsatisfactory, and the directors thereupon renounced the trial lease. All the outlays in connection with proving the field were written off last year's account. The construction of the railway to Uphall was a matter that had occupied the attention of the directors since the formation of the company but for various reasons it was one of other schemes that was from year to year left over. They thought, however, that the time had now come when the line ought to be made, and it would not only effect a saving in railway rates on material going to and coming from the works sufficient to justify the expense of making it, but it would also be of immense advantage when the shale-field on Drumshoreland Moor came to be opened up.
As to the future, there seems no doubt that they were entering on a year slightly marked by an universal depression in trade generally, with prices in their own particular industry lower at present than they have ever been known, and with a competition to contend against in America, in Russia, and in our own country, stronger than had ever before existed; but, notwithstanding all this, he ventured to express the hope that by the exercise of the most rigid economy, and by a further reduction o the i cost if manufacture, this company would maintain in the future the proud position which it had always occupied in the past. Mr John Hurll seconded the motion, which was unanimously adopted, and a dividend of 25 per cent was declared on the shares of the company. On the motion of Mr Hugh Howie, seconded Mr Blair, Mr Steele was re-elected a director of the company. Mr Wyllie Guild was reappointed auditor. This was all the business, and the meeting separated.
Glasgow Herald, 20th May 1886
1887 Annual General Meeting
BROXBURN OIL COMPANY. The tenth annual general meeting of the Broxburn Oil Company (Limited) was held yesterday afternoon in the offices of the company. Mr Robt. Bell, Cliftonhall, Ratho, the chairman, presided. Mr Kennedy submitted the report and balance- sheet, and stated that, in comparing the prices realised in the past year with those of the previous year, there was a considerable reduction in values, amounting to no less than £40,233 13s 7d, made up as follows - Scale, wax, and candles, £20,301 5s 5d; burning oil, £9848 S. 4d; lubricating oil, £7893 15s l0d and sulphate of ammonia, £2690 3s. Charges in trade, which include all office charges, salaries, directors' fees, agencies, expense of selling, and bad debts, amounted in the past year to a sum equal to 3.92 per cent on the gross sales. The amount of bad debts this year is under £460, equal to 0.l6 per cent of the gross sales, or about 5s 4d per £100. Mr Stirrat wished to know if there was any chance of the continual fall in prices coming to an end. Last year it amounted to £33,000. This year they had an additional loss of £40,000. If that was to go on he did not know where, they would land. It seemed to him that this company and one or two of the big companies had some idea of extinguishing the small companies. They went round about whenever they found anybody selling products at a less rate than another, and tried if they could go lower. It thus became a competition for the lowest price. Hitherto they had understood that the right way of competing was to compete for the highest price; but if they went bidding for the lowest price the result would be the extinction, not of the little companies, but of their own dividends. Perhaps Mr Kennedy would tell them if they had nearly reached the bottom.
The Chairman said be would be glad if he could assure them that they had reached the bottom. He thought they were at the bottom, but he could give no such assurance. Mr Stirrat was right in saying that the competition had been very great. They had endeavoured on a previous occasion to lay their heads together to keep up prices - he meant the eight companies in Scotland - but the arrangement fell through. They would have been glad if they could have done anything to keep up their prices, and if any means could be found they would he glad to do so still. Mr Stirrat asked how such a reasonable arrangement fell through; somebody must be to blame. The chairman said they had the Americans to compete with, as well as the other Scotch companies, for the scale, which was the principal product The Americans sent in about one-third of the consumption of this country. They had then to arrange with, as well as the oil companies in Scotland.
Mr Kennedy said Mr Stirrat's remarks were perfectly just. There was no doubt the pace at which they were going could not last. There had been a great effort made to come to an arrangement whereby prices would be maintained. At the beginning of the year be attended a meeting in London of the candlemakers. An agreement was then come to, but it was broken within a week, (Cries of "Name.") Name ! he might name the whole- they were all alike, not one better than another. There were over 60 candlemakers in the country, and in these circumstances it was almost impossible to get them to regulate prices. He then turned his attention to the fact that there were only eight producers of scale, and that if they could come to an agreement with them it would be impossible for candlemakers to cut down prices as they had done in the past. He accordingly made the attempt, but it also fell through. He did not wish to name any company or individual, but they were not unanimous, and the matter was allowed to drop. He had since been in correspondence with the Standard Oil Company of America to see if any arrangement could be made between them and the companies on this side. They said they would be happy to join with the Scotch companies, but they thought the time was not opportune - that they had better wait till the production was smaller than it was just now. They had not said that they would not join, and he had still hopes that they would do no.
Mr David Todd asked how the reserve fund was invested.
The Chairman said the reserve fund was used for the general purposes of the works. As was l stated in the balance-sheet, the plant account stood at £230,000, and the capital of the company was exactly £200,000.
Mr Todd - In fact the reserve fund is just part of the funds of the company. It is not a reserve fund properly speaking?
The Chairman - That is so.
Mr Todd - My impression is that that is not financially correct. 'You ought to be able to lay your hands on the reserve fund, and the money should be invested elsewhere.
The Chairman - I quite agree with you that the reserve fund should be invested outside the company, but if you did that you would just have to call up more money for working expenses, for you will see that we have more plant than the capital of the company, so that the money would have to be raised in some other way. We are of opinion that we can utilise it to profit in that way, but if times were turning prosperous again, and we had plenty of money, I think your way is the right way.
Mr R.D. Anderson said that there had been remarks outside that the directors had been parting with their shares. He did not wish the information for himself as he was quite satisfied on the matter, but he thought that for the information of the meeting the secretary might state the holding of directors now as compared with three years ago.
The Chairman said that some gentlemen had made enquiries regarding the matter. He did not know if Mr Anderson was one of these gentlemen.
Mr Anderston – No sir, I am not.
The Chairman said that the secretary would state the director's holdings.
The Secretary (Mr. J.M.King) said that this was information that any shareholder could find out at any time by coming to the office and looking at the register.
The Chairman - Do you want the information for two or three years back?
The Secretary said that the question had been asked of him, and he had prepared the figures for the last two or three years, and he would give them to the meeting for that period. A shareholder had called at the office and asked the question, and he had prepared the figures to be ready in the event of the question being asked that day. In June1885, the total holdings of the directors, amounted to, 4449 shares, in 1886 to 5127 shares land at the present tine 5252 shares. He could give the individual holdings if that was wished.
Mr Anderson - That is quite sufficient so far as I am concerned.
The Secretary – each director has increased his holding. Perhaps it might be more satisfactory if I give you the figures ("No, no").
The Chairman – You can get it from the register any day.
Mr. A.D. Strachan remarked that there had been a large reduction in the value of stocks last year, and asked if the amount could be stated.
Mr Kennedy said that the amount last year was £8800, the year before £4500, and this year, £2448 7s 5d.
The Chairman then moved the adoption of the report. He said - It is a matter of sincere regret to the directors, and to me personally, that, after a clean record of a return 25 per cent to the shareholders every year since the company commenced business, to have this year to come before you -and recommend a reduced dividend. I should have liked to be in the position of proposing for your acceptance a resolution commending the old dividend, but I am not here to offer any apology in the altered circumstances for the simple reason that I don't consider any apology is needed or necessary. Looking to the exceptionally depressed state of the trade, I incline to think that you are to be congratulated in having such favourable results presented to you at the close of a year so trying to the trade as the past year has been. You will observe from the report that we have written off for depreciation, capital expenditure £11,239, and that we have debited revenue with £17,962 for the maintenance of works and pits. After making these deductions there remains at the credit of profit and loss account the sum of £30,943, and we recommend that this sum be disposed of in paying a dividend at the rate of 15 per cent. This will absorb £29,962, and the balance of a £981 we propose to carry forward to next year, As you are aware, the reserve fund or undivided profits remains at £25,000. It would of course have been possible to pay a larger dividend than we recommend by taking the sum written off for depreciation out of the fund, but, looking to the best interests of the company, the directors thought it prudent to leave the fund untouched. As stated in the report, the overhead cost of manufacture has been practically the same as last year. No doubt it will be in your recollection that savings were effected last year to the extent of upwards of £3,000. This year, I am, glad to say, there were further savings to the extent of £10,000; but a considerable portion of this sum was swallowed up in meeting the increased cost of the shale!e through the action of the miners in working shorter hours at higher rates of wages. The output of shale is thereby restricted, and the general conduct of the men causes the relationship with them to be somewhat strained. It is not a happy state of matters, but we are of opinion that the bulk of the men will sooner or later come to see that their interests should be identical with those or their employers. With regard to insurance, we have presently fire policies for £140.000 over a portion of the company property, the annual premium on which amounts to about £900. The isolated and perfect character of our works, spread as they are over an area of fully 5O acres, reduces the risk very considerably and, looking to past experience and perfect immunity from fire, it is a question whether, unless the insurance companies reduce the premiums, we should not ourselves undertake a larger share of the risk, and insure only the stock of finished products, which could be done at lower rates. The report itself deals so fully with the general position of the company that I need not here detail you further by dwelling on details.
It may not, however, be out of place to me to make some remarks on the present state of the oil trade generally. We are all aware on the great increase within the last three or four years of oil companies in Scotland, and it occurred to me that it might be interesting to you to know how this affected the products of manufacture. From the Board of Trade returns I find that the output of shale in Scotland during the last four years was as follows: - In l883, l,230,729 tons; in l884, 1,489,649 tons, in 1885, 1,741,750 tons; in l886, 1,699144 tons. Carefully estimating the yield of this output for the last year, we get the following results:- Crude oil, 49,275,106 gallons; burning oil and naptha, 492,752 barrels; lubricating oil, 33,241 tons paraffin scale, 21,118 tons; sulphate of ammonia, 15,171 tons. This in itself is a large quantity of material to be disposed of, but in addition to it we have to take into consideration the imports from America and Russia. Dealing with these I find that there was, during the year 1886, imported from America into London alone, 700,000 barrels of burning oil and naphtha, and by a reasonable estimate the quantity imported into the United Kingdom would be over 1,500,000 barrels. Of lubricating oil the estimated quantity imported was 23,060 tons, and of paraffin scale and wax from 11,000 to 13,000 tons. The quantity of burning oil imported from Russia during 1886 was comparatively small, being only 33,000 barrels. A study of these figures will at once show you that the foreign imports, being so much in excess of the home production, have a decided influence be determining and regulating the market prices of the liquid products. Fortunately, however, the home industry has depended more on the yield of scale and sulphate of ammonia; and, if we take scale alone we find that while American petroleum contains less than one per cent of scale, Scotch crude oil gives an average yield of over 12 per cent, so that the American import of scale is about one-third of the consumption of that article in this country. You will therefore see the importance of keeping up the price of scale, and more especially when I tell you that an advance of one farthing per pound in the price of the scale manufactured by us is nearly equivalent to five per cent dividend on the capital of the company. Some time ago an attempt was made to regulate and maintain the price, and as there are only eight companies who produce this article in Scotland, it might, one would think, have been easily accomplished. All the companies, however, would not concur in the proposed arrangement, and it fell through, with a series loss to the trade generally. The depression, doubtless, still continues, but it is gratifying to me to be able to tell you that we believe we have now reached the maximum power of production of scale and candles, and that we have also seen the minimum prices of these a products. During the year 1886, as you will see from the figures I have given you, the output of shale in Scotland was less by 40,000 tons than it a was in 1885 while the consumption of American petroleum has also overtaken the production, the stock in America being less than it was twelve months ago, and less by five million barrels than it was three years ago. It is not for me to say any thing about the future, and I will, therefore, only add that I consider you fortunate in possessing a very valuable property, which was never in better order or more capable of doing its work than it is at present. (Applause.)
Mr James Steel seconded. He said that to meet present circumstances the directors and the managers of the work must look about to see what could be done in the way of meeting the severe competition. The great thing was to get up the price, but if that was not possible they must try to reduce the cost of manufacturing. Mr Henderson, the works manager, had contrived to do away almost entirely with the coal used in the firing of the retorts, and the saving in this way would amount to something like £4,000. A shareholder asked when this came into operation. Mr Steel said it had been gradually introduced but the saving was now in operation, and the full benefit of it would be got this year. He thought that an effort should be made to have some arrangement come to by which the price should give a fair profit on the production. That was the most reasonable thing. It was a very dangerous project to try to ruin a trade entirely because in that case every one must suffer very severely, and only the strongest would stand out to the end, The report was adopted.
The Chairman formally moved that a dividend be declared at the rate of 15 per cent per annum on the shares of the company. Mr Hurll seconded, and the motion was adopted. On the motion of Mr Morley, Waterford, seconded by ex-Provost King, Hillhead, the retiring directors, Messrs Robert Bell and William Weir, were re-elected. On the motion of James Kennedy, seconded by Mr Greenlees, Mr Wyllie Guild C.A,. was re-appointed auditor. This was all the business.
The Glasgow Herald, 19th May 1887
1888 Annual General Meeting
BROXBURN OIL COMPANY. The eleventh annual general meeting of the Broxburn Oil Company was held yesterday in the company's offices, Glasgow, Cllr. Robert Bell, of Clifton Hall, the chairman of the company, presiding. The secretary having submitted the directors' report and read the financial statement, which have already been published, The Chairman said- You have heard these statements. They are certainly not very rosy. However, there is still some satisfaction that we to have a possibility of having a little better trade in future. In moving the adoption of the report it is unnecessary for me to do morn than to refer to it generally; it has been in your hands for the last ten days. The directors, in submitting that report, regret that the result of the year's working is not so favourable as in previous year. It is a the matter of notoriety, however, that the whole trade has from various causes been passing it I through a severe crisis, and when looked at in the light of the continued depression, and the exceptional circumstances which it was our misfortune to have to combat during the at last twelve months, you have reason, I think, to be, on the whole, satisfied with the state of the company's affairs now submitted to you. You are aware that by the articles of association a sum of not less than 5 per cent. on the capital expenditure to must be written off for depreciation before a dividend is paid, and as the profits earned during to the past year were not much more than would meet the sum, I have heard it stated that we ought not to have proposed that a dividend should be paid. For the reasons, however, set forth in the report, and to which I shall afterwards allude, the directors felt that they were justified in recommending that the amount to be written off for as depreciation should be taken out of the reserve fund. That fund consists entirely of profits earned in previous years, and was created solely for the purpose of equalising dividends and providing against exceptional contingencies that might befall the company in any one year, In the opinion of the directors no circumstances could have occurred that would afford a better reason for applying this fund for the purpose for which it was created than what we have had encounter in the past year, and they accordingly I did not hesitate in making the recommendation contained in the report. If that recommendation is given effect to the sum standing at the credit of profit and loss account, after providing for the maintenance of works and the payment of interest on the preference shares and borrowed money, will be £12,467 12s; and the directors submit for your approval that this sum should be applied in paying a dividend of 5 per cent. to the shareholders, which will absorb £9987 10, and allow a balance le of £2480 2s to be carried forward to the current year.
The capital expenditure in the past year was principally incurred in opening up two new mines at Carledubs, which is at the extreme west of our mineral field, and in making a railway 1.5 miles in length to connect these mines with the works. This has opened up a new portion of our field, capable of supplying the works for a long time to come, and I am pleased to be able to tell you that the shale is of excellent quality. In my remarks in moving the adoption of the report at last general meeting, I alluded to the depressed condition of the trade, caused in a great measure by the keenness of competition, and as some of your number thought it desirable that the leading companies should co-operate as far as possible with the view of improving prices, your directors heartily endeavours to effect this, with the result stated in the report. The first outcome of the deliberations of the officials of the different companies was a resolution that all the workmen should be asked to accept a reduction of their wages. This request was acquiesced to by all except the miners, who had for some time enjoyed an exceptionally high wage, and who were on that account asked to submit to a larger reduction than their follow-workmen. They, however, resisted, and the result was a strike which lasted for no less a period than five months. A standing work, as you all know, is never a profitable one, and the strike doubtless caused a very great loss to the company. At the same time, it brought with it great suffering to the workmen themselves. Taking the trade all over, there must have been, from a reasonable estimate, a loss to the men of not less than £60,000 to £70,000 in wages alone. In the interest alike of the company and the men, I hope it will be a long time before we have a repetition of what has been such a misfortune to both.
As a further outcome of the deliberations I have referred to, an agreement has been entered into between the Scotch and American producers of scale for regulation the price, and, if necessary, restricting the production of that article. The price has been fixed in conjunction with the principle candlemakers of the United Kingdom, who have also entered into an agreement between themselves whereby the price of candles is increased in such a way as will not affect the consumption.
I am glad to say that the railway from the works to Drumshoreland has now been finished and opened for traffic. This railway will enable all the coals and goods coming from the west to be brought direct to the works from the Edinburgh and Bathgate line, instead of going around by Ratho, and will thus reduce the distance a about six miles and effect a considerable saving in railway rates to the company. The works, I am pleased to tell you, are in splendid order. Several improvements have been introduced and, without giving you the exact figures, it will be satisfactory to you to know that the cost of production has been considerably reduced. This has been brought about by improved plant, a smaller consumption of coal, less labour, and reduced cost for chemicals. With regard to the position of the oil trade in America, I find from the latest information that the stock of crude oil has been reduced from 33 million barrels to 25 million barrels within the last 12 months, and is at the present moment about 14 millions of barrels lower than it was at a the highest point, and the daily production has gone down from 64,000 barrels to 41,000 barrels, while the price of crude has advanced about 50 per cent. Of course we may look for competition from Russia, but after allowing for all the advantages of all abundant and cheap a supply of crude oil from the wells in that country, If as that crude contains no products except burning and lubricating oils it would require a larger price than can be got to enable it to be sent to this country at a profit. I am glad to say that prices with us have already improved, and are on a more satisfactory footing, and, if the agreements I have referred to are faithfully carried out, the trade, as a whole, will benefit therefrom, and we can I look forward with some degree of confidence to the results for the present year. With these remarks, I beg to move the adoption of the report. Mr James Steele seconded, and the report was unanimously adopted.
The chairman then moved the declaration of a dividend at the rate of 5 per cent. Mr. John Hurll seconded, and the motion was adopted. The confirmation of the election of Mr James G. Leadbetter, Edinburgh, and the re-election Mr John Hurll and Mr William Kennedy as directors having been agreed to, Mr Wylie Guild was re-elected auditor, and the proceedings terminated with the customary votes of thanks.
The Glasgow Herald, 17th May 1888
1889 Annual General Meeting
The twelfth annual general meeting of the Broxburn Oil Company (Limited) was held yesterday afternoon in the office of the company, 28 Royal Exchange Square, Glasgow- Mr Robert Bell, chairman, presiding. The report, which has already been published, was held as read. Mr Kennedy, Managing director, submitted the profit and loss statement for the year, and stated that, in comparing the price realised with those of the previous year, there was an increase in values amounting to £30,182 10s 5d, Charges in trade- which included all office charges, Salaries, directors' fee, agencies, expenses of selling, and bad debts- amounted in the past year to a sum equal to 3.85 per cent on the gross sales, as against 4.46 per cent in the previous year. The amount of bad debts this year was £544, equal to 14 per cent of the gross sales, or about 3s 8d per £100.
The Chairman in moving the adoption of the report said; - you will I am sure, agree with me that the statement which Mr Kennedy has just read is very gratifying, and you will observe from the report, which has been in your hands for the last week, that after maintaining the works and writing off £11,379 for capital depreciation, the net profit for the year, including £2480 brought forward from last year, amounts to £46,755. The directors submit for your approval that this should be divided in payment of a 6 per cent dividend to the preference shareholders, which will amount to £6000, and in payment of a dividend at 15 per cent. to the ordinary share- holders, amounting to £29,962, and they propose to add to the reserve fund the sum of £10,000, and to carry forward the balance, £793, to the current year. With regard to the reserve fund, of course, as you are aware, it was provided to meet such contingencies as happened last year, when we had to draw upon it. At the same time, I think you will all agree that we were wise in, I may say, practically replacing the amount borrowed from the fund last year. The directors have no intention of running this fund up to an indefinite amount. They are rather inclined to think that it should have kept pretty much at the figure at which it stands now, or, say, about £25,000. As you will no doubt gather from the report, various circumstances have tended to produce last year's favourable results. There has been a considerable improvement in trade, which is immediately reflected on companies such as ours by an increased demand for the products which we manufacture.
There has been a decreased cost of production, and there has also, owing, of course, to a great extent to the agreements entered into through the Mineral Oil Association at the beginning of the year, to a considerable extent been an absence of the foolish and unprofitable competition which has existed for the last few years; and last, though not least. I am very pleased to say there has been an entire absence of disagreement between the workmen and the companies which I venture to say has been a source of great profit to both. The capital expenditure, you will observe, has amounted practically to what has been written off for depreciation. I can assure you that every care has been taken to keep this as low as possible, but such expenditure in a large work like sure is unavoidable. The directors do not anticipate a very large expenditure under this head for the current year. There is one thing, however, they have decided to do - namely, to erect a better class of houses for their works foremen, and to improve the other workmen's houses, so as to give them additional accommodation and comfort. You will observe that under the heading " Works, &c.," we state that the cost of production has been lower than at any time since the company started. This, I am sure, you will consider very satisfactory, particularly as this result has been achieved in the face of an increased cost of shale, and we attribute the low cost of production to the recent improvement in our plant end the continuous distillation process. In conclusion, although I do not wish to say anything which might be construed in too sanguine a manner, at the same time I think it right to say to the shareholders that in our opinion the prospects for the coming year are favourable.
The agreements between the Scotch oil companies and American scale producers, and again between them and the candlemakers, have all been renewed for another year, and it is just possible that in order to keep the supply equal to the demand it may be I necessary for the trade to shut down for a short time, but I am sure you will agree with us that it is better that we should put through a less quantity at a profit than do a large amount without any profit. All low-priced contracts have now been completed, and we start the year with contracts in our books at enhanced and remunerative prices, although I may say that we have to pay higher prices for coal and other materials than we were doing, but of course the loss in this respect will be very small compared with the gains on the other side. I have therefore the pleasure in moving the adoption of the report.
Mr John Hurll, in seconding, said they would all agree with the chairman in saying the report was satisfactory. A shareholder asked why no dividend was paid six months ago on the preference shares. There appeared to him to have been undue delay in this matter. Mr Kennedy said the preference shares were in precisely the same position as the ordinary shares. A motion would afterwards be submitted to the meeting that the dividend on both classes of shares be payable, one half on the 4th June next and the other half on 4th December. The Chairman said the directors were sorry there should be any misunderstanding about this, but when the preference shares were issued it was agreed that they were to get 6 per cent up to the 31st March of last year, and that after that both ordinary and preference shares should be placed on the same footing, the dividend being payable half- yearly.
Another Shareholder said there had been a good deal of misunderstanding in connection with this, whether dissatisfaction he would not say. Many parties thought they should have got their interest in October or November of last year. They were to have no dividend till June, and then they ware only to get n half-year's dividend. With all due deference to the directors, he thought they ought to have paid an interim dividend, and completed the year's dividend now.
Another Shareholder said it simply came to this, that the preference shareholders' only got 5 per cent for the last year instead if 6 per cent.; and another gentleman said the company were getting the use of £3000 for the next six months which ought to be in the pockets of the preference shareholders, Mr Kennedy explained that the directors were acting strictly according to the arrangement, and that any other course would be illegal. The report was then adopted.
On the motion of the Chairman, seconded by Mr James G. Leadbetter, a dividend of 6 per cent on the preference shares and 15 per cent on the ordinary shares, payable on June 4 and December 4, was declared. Mr James Steel and Mr Wm. Weir, the retiring directors and Mr Wyllie Guild, auditor, were afterwards reappointed, and the meeting was brought to a close with a vote of thanks to the chairman.
The Glasgow Herald, 23rd May 1889
1890 Annual General Meeting
BROXBURN OIL COMPANY The annual meeting of the Broxburn Oil Company (Limited) was held yesterday in the offices of the company, Exchange Square, Glasgow. Baillie Steel, of Edinburgh presided, in the absence of the chairmen of the company (Mr Bell). The report, which has already been published, was laid on the table. It recommended a dividend of 15 per cent for the year. Mr Kennedy (managing director) submitted the profit and loss statement, and mentioned that the charges in trade, which included all office charges, salaries, directors fees, agencies, expense of selling, and bad debts, amounted in the past year to a sum equal to 3.55 pr cent on the gross sales, as against 3.85 per cent in the previous year. The amount of bad debts was £488 16s 9d, equal to 14 per cent of the gross sales, or about 2s 1Od per £100.
The Chairman in moving the adoption of the report, said - From the report you will observe that, after writing off £11,662 for capital depreciation, the net profit for the year (including £793 brought from the previous year) amounts to £42,210, which the directors recommend should be disposed of as follows:- £6000 in payment of a dividend at the rate of 6 per cent to the preference shareholders; £49,672 in payment of a dividend at a the rate of 15 par cent to the Ordinary shareholders ; £4000 to be added to the reserve fund, and £2287 to be carried forward to the current year. There is no doubt that, but for the advance in wages and the increased coat of production caused by the rise in the price of coal and other material during the last months of the financial year, the profits for the year would have been considerably greater; but while this is so, I think we In have every reason to be satisfied with the result of at the twelvemonth's working. The directors have recommended that £4000 be added to the reserve fund, which will is that event amount to £27,467. In view of making this fund available to meet the expenses of alterations which are contemplated in the retorting department, the directors feel assured that their recommendation will commend itself to the shareholder.
With that regard to the alterations on the retorts, the directors have every confidence that great benefits will thereby accrue to the company. The company is greatly indebted to Mr Henderson in the past for the many improvements which he introduced from time to time, and which conduced so much to the low cost of manufacture. Among these I would specially mention the patent continuous distillation process which has now been in use at the works for several years. By that process there is not only a very great saving effected in labour, fuel, and maintenance, but there are also obtained an increased quantity and an improved quality of as products. From their experience of what Mr Henderson has done in the past, the directors anticipate very favourable results from him in his improved retort. The experimental set already erected has worked very satisfactorily and gives much larger yields of paraffin and ammonia than what have hitherto been got. The capital expenditure for the past year, you will notice, was a extremely moderate and considerably less than the sum written off for depreciation, and it must be satisfactory to you to that the directors do not expect large expenditure during the current year. It is also a matter of satisfaction that the agreement between the Scottish and American scale producers, and between the candlemakers, have again been renewed, and that there is a considerable advance in prices. Altogether, I think we are justified in believing that the company's prospects at for the coming year are favourable.
Before sitting down I cannot help referring to the loss which the company has sustained by the death of Mr. Wm. Weir, who acted as a director since the formation of the company and always took an active interest in its affairs. By his co-directors, with whom he at was so long associated is the management; his services will be greatly missed. As Mr Weir's death happened so lately, the directors preferred to leave the appointment of his successor to be made at this meeting, and a resolution will accordingly be afterwards submitted to you recommending the election of a gentleman whose name, I am sure, of will be acceptable to all. Treasurer Richmond, in seconding, referred to several satisfactory features of the company. In the first place, as regards the reserve fund, in no company that he was aware of was there such a liberal allowance in the way of reserve for the purpose of possibly equalising dividends or effecting improvements is the works.
In the next place, he spoke with warm approval of the efforts of Mr Henderson, their works manager, in improving the retorts. In the third place, it must be very satisfactory to the shareholders, he said, that the arrangement between the scale producers was working so satisfactorily, and was preserving a reasonable margin of profit in the trade. He hoped the existing state of things might long continue so that not only might their workman so participate as they were entitled to do in the good trade, but the shareholders who had risked their money might receive some benefit likewise - (Applause). The report was adopted. The Chairman next moved the declaration of the dividends - 6 per cent on the preference and 15 per cent on the Ordinary shares. Provost Murray, Pollockshields, in seconding, said the company was very much indebted for its success to Mr. Henderson. They were also very much indebted to the successful management of the commercial department. (Applause.) The motion was agreed to. On the motion of Mr Hurll, seconded by Mr Hoggan, Mr James Beckett was appointed director of the company in room of Mr Weir, deceased. Mr James Meichie moved that Mr Robert Bell and James G, Leadbetter be reappointed directors of the company. This was seconded by David Brown, Dalry and also agreed to. On the motion of Provost Stirrat Maryhill,- Mr Wyllie Guild was re-elected auditor of the company. This was all the business before the meeting.
The Glasgow Herald, 22nd May 1890
1895 Annual General Meeting
BROXBURN OIL COMPANY (LIMITED). The annual meeting of the shareholders of the Broxburn Oil Company (Limited) was held in the offices of the company, 28 Royal Exchange Square, Glasgow, yesterday - Bailie Steele in the chair. The Chairman, before proceeding with the business, alluded to the death of their late chairman, Mr Robert Bell, and stated that by his death the company had been deprived of the services of one who always took a deep interest in its affairs.
The report having been held as read, The Chairman moved its adoption. He said that at last annual meeting he indicated that the directors anticipated favourable results from the working of the year that had been entered on, and these, he was happy to say, had been attained. They might have been still more favourable but for the unfortunate coal strike, which entailed on the Company a greatly increased charge for fuel. The directors, however, thought it better to pay the enhanced prices for coal, and keep the works going, rather than stop manufacturing. After paying interest on borrowed money, and current charges, the balance left for disposal, including the sum of £1234 14s 2d, brought from the previous year, was £36,936 Os 9d, and the directors, after full consideration, recommended that it be disposed of as follows:-That £14,224 12s 6d be written off as depreciation; that £6000 be applied in paying the dividend on the Preference shares, and £9987 l0s in payment of a dividend at the rate of 5 per cent. on the Ordinary shares; that £8000 be placed to the credit of retort renewal account; and that the balance of £7244s 3d be carried forward to the current year.
It would be noticed from the profit and loss statement that the greater part of the profit earned had been got from the crude oil and ammonia departments. In the current year that would be somewhat altered. Owing to the decreased value of ammonia, a reduced profit might be expected in this department, but, on the other hand, a considerable increase of profit might be looked for from liquid products. The reserve fund remained at the sum at which it stood last year- viz., £9257 10s 4d- and no addition was made to capital expenditure. There was, of course, a considerable sum spent in renewing retorts, but that, being a replacement of plant, fell to be paid out of revenue. In the month of July the fourth bench of new retorts was started, and the last two benches were completed in December. Since then the company had had the full benefit of the favourable results, which were anticipated from the substitution of the new for the old retorts, and on behalf of the directors he was pleased to he able to say that these results had exceeded their most sanguine expectations. The additional profit derived from them amounted to a very substantial sum. That had no doubt been obtained at a considerable expenditure, and there was still a sum of nearly £40,000 standing at the debit of the retort renewal account. The directors were very anxious not only to see this balance wiped out as soon as possible, but also to get all the borrowed money repaid, and this would be the more readily effected now that all the alterations and additions were completed. At their last visit to the works they could not help noticing the thoroughness with which these alterations had been carried out, and the completeness with which every department of the works was being conducted. It was satisfactory to be able to state that, notwithstanding the large increase in the price of coals, the general costs of manufacturing were not seriously altered. As regarded the clause in the report bearing on the Preference shares, the shareholders were aware that in the resolutions creating these shares in 1887 there was reserved to the company the option of redeeming them at the expiry of five years from the creation thereof, and within five years thereafter by paying to the holders a premium of 10s per share. The question had been asked by several shareholders whether the company meant to avail itself of this option, and in the opinion of the directors the time had now come when this should be determined. No doubt money might at present be borrowed at a cheaper rate, to come in place of the capital value of these shares; but, on the other hand, as the company, on redeeming them, would have to pay a premium of 35000 to the holders of these shares, most of whom were ordinary shareholders, and as it would be necessary to apply to the Court of Session for powers, the directors recommended that it he now declared that the company would not avail itself of the option reserved to it.
The prices realised last year for the various products were the lowest on record, with the one exception of sulphate of ammonia, the price of which was better than it had been for some years previously. There was no doubt that the prospects of the coming year were more encouraging. Looking to the enormous reduction of the stock of petroleum in America, and the fact that the production at the present day was less than the average consumption of the year, it was difficult to forecast what the results might be generally, but as regarded this company he thought it might fairly be anticipated that the expected fall in the price of sulphate of ammonia would be compensated by the increased prices likely to be obtained for other products, and by the reduction of costs, following on the completion of the recent improvements in the works. There was only one other matter in the report to which he wished to allude, and that was the re- commendation by the directors that the works manager, Mr Henderson, be elected a director of the company. (Applause.) The election of a director was purely a question for the shareholders, but looking to the untiring energy with which Mr Henderson had always applied his abilities in furthering the interests of the company, the directors were satisfied that in recommending his election as a director in room of Mr Bell they were only anticipating the wishes of the shareholders in recognising in this way Mr Henderson's valuable services. Mr James G. Leadbetter seconded the motion. He said they had passed through troublous times, and had borne the brunt of the battle. What with low prices, financing to such an extent to meet the new works at Roman Camp, and the retorts and extensions that were needed, he thought they had been well rewarded by even the small dividend of 5 per cent. No doubt if they had enhanced prices they might look forward to better times. They heard a good deal about the exhaustion of nature's oil supplies in America, and, though he did not wish any harm to those on the other side of the Atlantic, he hoped those on this side would have a turn of the good things. The report was approved.
On the motion of the Chairman, the dividends were then declared. The Chairman moved a resolution carrying out the recommendation of the directors that the option of redeeming the Preference shares created in 1887 was now at an end. Mr George Morton seconded the motion. He remarked that at first the recommendation of the directors was a little disappointing, in that the six per cent, on the Preference shares was to be made in perpetuity. He thought the dividend on these might have been reduced to five per cent, but he had no doubt the directors had taken all things into consideration before they made this recommendation. The motion was adopted. Bailie Steele and Mr James Beckett were re- elected directors, and on the motion of Mr Richmond, seconded by Bailie John Murray, Mr Henderson was elected a director in room of the late Mr Bell. Mr W. A. Guild was re-elected auditor.
The Glasgow Herald, 23rd May 1895
1896 Annual General Meeting
BROXBURN OIL COMPANY (LIMITED). The annual meeting of the shareholders of the Broxburn Oil Company (Limited) was held in the offices of the company, 23 Royal Exchange Square, Glasgow, yesterday - Bailie Steele, Edinburgh, in the chair. The report, which has been already published, having been held as read, the Chairman moved its adoption.
He said the report dealt fully with the position of the company's affairs. After paying interest on borrowed money and all current charges the balance left for disposal (including the sum of £724 4s 3d brought forward from the previous year) was £49,686, 8s. 5d, and the directors, after full consideration, recommended that this sum should be disposed of as follows:- That £13.510 14s 7d he written off as depreciation; that £6000 be applied in paying a dividend at the rate of 6 per cent on the Preference shares, and £14,981 in payment of a dividend at the rate of 7.5 per cent on the Ordinary shares; that £14,544 l0s be placed to the credit of retort renewal account; so that the balance of £649 18s 10d be carried forward to the current year. By the articles of association of the company, the directors were bound, before recommending a dividend, to write off for depreciation not less than 5 per cent. on the capital expenditure at the previous balance. That percentage amounted to £13,510 14s 7d, and the directors recommended that the further sum of £14,544 be placed to the credit of retort renewal account. These two sums amounted together to £28,055 4s 7d, while there had only been spent on capital account the sum of £4178, so that the difference of £24,000 represented the extent to which the financial position of the company had been improved during the year. It was the intention of the directors that the sum of £25,090 still standing at the debit of retort renewal account be written off as soon, as possible, and that the item of £49,910 which appeared in the balance sheet as money on loan, and which truly represented all the company's indebtedness, should be wiped out with all possible convenience.
The only capital expenditure in contemplation during the year would be in connection with the addition to the vitriol works. The estimated cost of that addition was £12,000, of which the sum of £4178 had been spent during the past year. The directors were satisfied that when completed, within the next few months, this extension, which would enable the company to manufacture all the acid required at the works. It would effect a considerable saving, besides ensuring regular supplies. Compared with the previous year, the results of the past year's working were in strong contrast. In the year ending 1895 the bulk of the profit was derived from the crude oil and ammonia departments. In the past year the profit of these departments was less, while the profit in the refinery department was considerably increased. In evidence of this he might mention that the prices realised for sulphate of ammonia showed a shrinkage of not less than £27,559, while, on the other hand, there was an increased profit in the refinery department of upwards of £39,000.
It was somewhat difficult to forecast the future. They began the year with reduced prices for wax and candles, while the price of ammonia was somewhat less than the average price of last year. On the other hand, they anticipated getting as good prices for liquid products as were got last year, and with cheaper coal, chemicals, and other material, aid the works now completed and in perfect order, the directors looked forward with confidence to the I results of the coming year. The Chairman further I referred to the resignation of two very greatly respected members of the board, Mr Hurll and Mr Leadbetter, and remarked that the shareholders would cordially participate with the remaining members of the board in their expression of deep regret at the loss which the company would sustain through their resignation. The election of their successors was, of course, a matter for the shareholders, but in making the recommendation which they had done in the report, the directors had been actuated only by the desire to further the best interests of the company.
Mr Drysdale seconded the motion, which was put to the meeting and carried. The Chairman moved the declaration of the dividends, and this was seconded by Mr Beckett, and agreed to. The Chairman moved and Mr Orr seconded the election of Mr David Richmond and Mr Jas. Watson Stuart as directors in room of those retiring. This also was agreed to. The auditor was reappointed, and on the motion of Mr Hutchison, a cordial vote of thanks was awarded to Messrs Hurll and Leadbetter, the retiring directors, for the services they had rendered to the Company. A vote of thanks to the Chairman terminated the proceedings.
The Glasgow Herald, 21st May 1896