COMPANY MEETING

SMITH'S POTATO CRISPS

HIGH POTATO COSTS AFFECT PROFITS

THE Thirty-third Ordinary General Meeting of Smith's Potato Crisps Limited was held on August 1 in London. Mr. F. Le Neve Foster (Chairman) presiding.

The following are extracts from his circulated Statement: The Net Group Profit after taxation is £565,798 compared with £876,158.

The Board recommend a Final Dividend of 30% plus a Cash Bonus of 10% which makes, with the Interim Dividend of 15%, a total distribution of 55% for the year, which is the same as for the previous year.

Last year I referred to the exceptionally difficult period for production owing to the very poor quality of potatoes from the 1960 crop. As the Board ex- plained in its Interim Statement the aftermath of these conditions carried over to the first part of the year now under review and resulted in excessive potato costs during that period. We then had reason to hope, from the official estimates available, that the 1961 potato- crop would prove to be more favourable and that for the remainder of the year we might get some' relief on prices. In this we were sadly disappointed. The short-fall in the potato crop, contrary to the official estimates, has de- veloped since early February leading to near famine conditions and record high prices. Potato costs of the Parent Company alone exceeded those of the previous year by a figure approximating £421,000 (31% increase). These conditions will also continue to affect the results in the early months of the current year.

Dealing with the huge quantities of potatoes— over 80,000 tons per annum--which we consume, fundamentally, these are matters which are outside our control.

Your Board is energetically continuing to explore and taking steps in several directions to find means for mitigating in future the severity of the impact of such vicissitudes in the cost of our raw materials which is such a vital problem for our business.

Group sales show an increase of the order of 6% on the total figure for the previous year; in the case of the Parent Company in spite of greater com- petition and the poor weather during the summer period.

We have just put on the market a new pack known as King Size retailing at a 1/-. We are also marketing a flavoured crisp—cheese and onion. It has had an excellent reception and its sales are encouraging.

PRICES The present retail price of our standard bag is 4d; this compares with a price of 2d before the War. In the Board's view, it is not practicable to make a temporary price increase to meet what we believe to be a passing phase.

The Board has decided, for the present at any rate, to maintain the present retail price of 4d a bag and to continue its traditional policy of taking the rough with the smooth and thus serving the customer; on this policy the success of our business has been built.

In view of the trend of general cost increases. which it seems will inevitably continue, the situation will continue to be closely watched by the Board, but, in the meantime, it is hoped that shareholders will be understanding and that customers will give Smith's the credit for taking a notable stand in resisting price increases.

QUALITY THE KEYNOTE

Quality is the keynote of our policy and we pay the greatest attention to all matters which are neces- sary to maintain it, using the finest products avail- able and methods of Processing to impart just that difference in flavour and keeping qualities for which Smith's are famous.

The report was adopted.