RICHARD THOMAS POSITION
In most circumstances I would try to dissuade a board of directors from crossing swords with stockbroking firm, which happen to think ill of the company's shares. After all, everyone is entitled to his own view of what a com- pany's prospects are, and it is a broker's job, and not the directors', to give investment advice. I feel, all the same, that shareholders in Richard Thomas and Co., the steel and tinplate combine, should be grateful to Sir William Firth for the clear statement of the position he has now issued as a challenge to his critics. Richard Thomas is a big under- taking with a correspondingly large register of shareholders, and when City whispers drive down the prices of even the prior charge issues to levels which reflect badly on the company's credit status, it is obviously desirable that the facts should be revealed. Here is the story of the recent fall in Stock Exchange quotations : •
Current Price. Highest 1937.
Present Yield Per cent.
£ s. d.
4 p.c. First Mortgage Debenture
82 99 4 17 6
61 p.c. Cumulative Tax Free
Preference .. ..
225. 3d. 32S. 6d.
800 Ordinary 6s. 8d. shares 17s.
8s. 6d.
II 15 o
If the decline had been confined, within reasonable limits, to the ordinary shares, I think the board would have been well advised to ignore it and let the annual accounts due in July, tell their own story, but the fall in the prior charges is a more serious matter. City cynics have been saying that the debenture interest and preference dividend are jeopardised in current trading conditions and when so many unpleasant surprises have disturbed investors' who can wonder that many nervous holders have taken fright and sold out ? - * * * *
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