BRITISH OXYGEN PROGRESS
It is good to see such a progressive undertaking as British Oxygen bringing its accounting methods into line with its splendid technical achievements by issuing a statement of consolidated profits. Last year, it seems, profits on this basis rose from £1,118,996 to £1,162,675 and, after allowing for depreciation and income-tax, net consolidated profit was £10,5oo higher at £581,064. Once again the ordinary divi- dend is to be 17 per cent., which is shown to be covered by a comfortable margin and allocations to general reserve and special provisions against assets, apart from depreciation, amount to £112,160, against £59,901 a year ago. The board has therefore followed its traditionally conservative policy, as is obviously fitting in current conditions.
Stockholders will be encouraged by the 1938 results which demonstrate that the group's expansion has merely been slowed down but not arrested by the setback in general industrial activity. To judge from the balance-sheet the additional funds raised last July by the issue of t,000,000 5 per cent. second preference shares have not yet found full employment. Fixed assets have increased by only £230,000, whereas the proceeds of the issue were over £1,1oo,000. Cash has risen by £33,600 to £388,082, and a bank loan, which appeared in the 1937 balance-sheet at £200,000, has been repaid. At 67s. 6d. British Oxygen ir ordinary units yield 51 per cent. While I think the speculative possibilities for the near future are fully discounted, I advise investment holders not to sell.
Venturers' Corner These results from the Union-Castle Mail Steamship Company are really disappointing. I had hoped—and the chairman's review justified such hopes—that profits would enable the company to resume ordinary dividends with a modest payment for 1938. The accounts show that not even the preference dividends were fully earned. Net revenue, after depreciation, fell last year from £446,833 to £66,204, and it is only by crediting £105,685 from taxation reserve not required that the preference dividend has been covered and the carry forward raised by some £39,000 to £189,836. Obviously, the Union-Castle has felt the full brunt of the decline in freight rates and the volume of trade, and it has also suffered from the suspension of refined gold shipments from the Cape.
On the Stock Exchange the market's surprise and dis- appointment have been reflected in a fall in the ix ordinary units from 13s. to 8s. 6d., which seems to me to do less than justice to the position, uninspiring as it is. So far as gold shipments are concerned, there is a reasonable prospect of a resumption, but it is also clear that the company's ship.. building and re-engining commitments will involve heavy annual repayments in the next few years. Even so, the equity of a company with such up-to-date and well-depre- ciated assets seems to me to be worth more than the current market price. Holders who have bought higher up might certainly consider averaging, as a resumption of gold ship- ments should make a considerable difference to this year's revenue.
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