Venturers' Corner
It is surely a grim commentary on the state of speculative markets that so excellent a report as that of John I. Thorny- croft, the shipbuilders, marine engineers and commercial vehicle makers, should have caused scarcely a ripple in the company's shares. The really interesting share is the £1 71 per cent. non-cumulative-participating preferred ordinary, quoted around 19s. 6d. No dividends have been paid for seven years, but it is apparent from the latest earnings figures, in conjunction with the growth of the order book, that the basic 71 per cent. should be paid, as a minimum, for the year ending July 31st next.
Profits for the year ended July 31st, 1937, leapt from L413,240, after charging debenture interest and depreciation, to £109,422, and all preference dividend arrears are to be -cleared off. Deduct a normal annual preference dividend of £12,000, which is now all that will have to be met, and there is a balance of £97,422. To pay 71 per cent. on the preferred ordinaries takes only £19,000; so that if there 'is no increase in profit this year, such.a -dividend. could -be- pa;.d_and a large sum put to reserve. But profits should rise and very substantially, for orders in hand are much larger than in NOvernbir, 1936. The company's business is closely dependent on general construc- tional activity and its shares are correspondingly subject to Wide fluctuations. As a speculation, the preferred ordinary look worth holding at this early stage of the company's'recovery.
. CUSTOS.
[Readers' enquiries, or requests for advice, regarding particular shares will be answered periodically in. print or by letter. Corre- spondents who do not desire their names to appear should aPPenci initials or a pseudonyms to their questions.]
Previous page
