AUSTRALIAN MERCHANTS' SHARES One hesitates, in the light of the
obvious uncertainties of international politics, to stress the merits of merchanting companies' shares, but with the proviso that the general recovery movement is maintained, I think a good case can be argued for the shares of the companies engaged in the merchanting section of the Australian trade. The undertakings I have in mind are old favourites of these notes, Goode, Durrant and Murray, D. & W. Murray, and Paterson, Laing and Bruce, all three old-established businesses which, after many years of depression, have now returned to the profit-earning stage.
The 7 per cent, preference shares of Goode, Durrant and Murray have gone furthest in regaining investment status up to date. This company managed to avoid a capital reconstruc- tion and has been able to cover four years' preference dividend
arrears out of the profits of the past two years. The present price of the shares is 26s., which includes one and a half years' dividend, equivalent to is. 8d. net, just declared. There are two and a half years' arrears, equivalent to 2s. 4d. net per share, still to be cleared off, so that, allowing for these arrears and the dividend now about to be paid, the net price to the buyer is .brought down to 22S. The shares are an attractive proposition for income on this footing. I estimate that, if all goes well, it should be practicable to pay two years' dividends out of the current year's profits, although a larger preference capital is now ranking.
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