Venturers ' Corner It is usually significant, in these days of
dull markets, when activity springs up in an out-of-the-way share, since the buying or selling is likely to be well-informed. In the last week or two there has been some quiet support for the first and second preference shares of Old Silkstone Collieries, which I imagine is based on anticipations of a satisfactory report next month. For the year ended March 31st, 1938, this company made a net profit of £41,493, out of which the first preference holders received their cumulative 6 per cent. which was covered about 3 times, the second preference got their non-cumulative 5 per cent., plus a participating 4 per cent., making 9 per cent. in all, and a 4 per cent. dividend was paid on the ordinary 5s. shares. Those profits were earned, of course, in a period of prosperity in the coal trade when not only coal but coke prices, in which the com- pany is substantially interested, were high. What is the present position and prospect?
Obviously, the accounts covering the year ended March 31st, 1939, during which coke prices were materially lower, will not show profits on quite the same level as in the pre- ceding year, but I look for satisfactory figures. First pre- ference holders should again get a very well-covered 6 per cent., and I shall be surprised if there is not something more than 5 per cent. for the second preference shares. If one assumes that the dividend is 6 per cent. in both cases, then the indicated yield on the first £r preference at I2s. is 'to per cent. and the LI second preferences at 9s. will be giving • over 13 per cent. These seem to me to be unduly high returns in view of the promising outlook, the prospects for both coal and coke now being greatly improved by the strong recovery in the iron and steel trade. Both preferences are worth putting away as speculations for their high yields and chances of capital appreciation.
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