MARGIN OF " COVER."
Until the full annual Reports for the current year haVe been issued by the railways it is very difficult to judge the precise merits of Railway Prior Charge issues as measured by the surplus net revenue remaining before the Ordinary dividends are paid. During recent yeais Ordinary dividends and in some cases even Prior Charge interest payments have only been kept up by encroachments on reserves, and while the common practice .at the moment is to measure the possibilities of revenue for the current year with those of the year 1925, the fact remains that even in that year considerable sums in many instances were taken from the reserves. In the circular from whiCh I have already quoted the follOVting very interesting table is given setting out the margin of cover for Home Railway Prior Charge stocks based upon the'results for 1925 ; the reader is reminded that it Is scarcely prudent to expect better results this year than were obtained in 1925 excepting, perhaps, in the case of the Great Western Railway. The following table, therefore, sets out the amount of revenue remaining for distribution in 1925 after all the dividends on the Prior Charge stocks have been met :— L.N.E.R.
L.M.S. G.W. South- 000's omitted ern
£ £ £
1925 net receipts .. .. 10,129
18,002 7,108 6,416
lnt. and fixed
charges 4,604 5,545 2,499 1,948
5,525 12,457 4,609 4,468
-I-Div. on Guaranteed
Stock 2,428 1,628 1,191 266* tDividend on 3,097 Preference 10,829 3,418 4,202 Stock • • .. 4,775 6,828 1,771 2,129
Short 1,678- Balance 4,001 1,647 2,073 * On Guaranteed Preference. t 1926 figures.
The. reason for 1926 figures being taken for the interest on fixed charges is, of course, to be found in the fact that some of the companies have issued fresh stock during the last two years.