Last month ROLLS-ROYCE issued one new share for four at 37s. and these shares can be bought at 5s. premium to yield 5.3 per cent. This seems to be a good opportunity of acquiring a stake in one of our outstanding industrial equities. The production of aero engines in this couatry is now in the hands of only two companies— ROLLS-ROYCE and BRISTOL SIDDELEY ENGINES, which is jointly owned by HAWKER SIDDELEY and BRISTOL AEROPLANE. The cancellation of various aircraft projects last year badly affected both companies, but Rolls-Royce has now out- standing orders worth £262 million for its three great jet engines—the Dart, the Conway (VC 10, etc.) and the Spey (Trident, etc.)—which will entail a big increase in deliveries. Aero engines account for over 80 per cent of the Rolls turn- over, Rolls-Royce and Bentley cars for probably about 10 per cent and petrol and diesel engines and railway equipment for the balance. A divi- dend of 11 per cent has been forecast for 1965 and this distribution is to be maintained in 1966 on the capital increased by the rights issue. Sell- ing on a price-earnings ratio of 13.7, with earnings estimated at 3.06s. per share, with corporation tax at 40 per cent, the shares seem eminently suitable for long-term investment.