Company Notes
ON November 7 Mr. G. W. Harriman toa over from Sir Leonard Lord the duties of chairman of the British Motor Corporation, sir Leonard, after forty years valuable service to the motor industry, becomes a vice-president of the Corporation. The new chairman's task in presenting the accounts for the year ended July 31, 1961, is not an enviable one. Both the April and July budgets this year were far from help' ful to the motor industry, which has over the past five years exported £2,610,000.000 Worth of its products, equal to 15 per cent, of the nation's trade. Politicians were not the onlY enemies of BMC; very damaging industrial dis- pates (so common to the industry) cut produc- tion by the loss of 34,461 vehicles. The America" slump, from April, 1960. to February, 1961, drastically affected BMC exports to that coun- try at the same time as Australia imposed heavier taxation on her imports. In fact, these two markets alone were responsible for a 40 Per cent. drop in the Corporation's total exports. As a result the total production of units fell from 669,122 to 601,399 and sales turnover bY 10.2 per cent. This decline is the real answer to the heavy fall in the pre-tax profits from £26.93 million to £10.15 million. The net profit was £5,776,340 against £13,361,367. BMC hits numerous overseas subsidiary companies, while exports to Europe have advanced by 79 Per cent. over the past four years. The new chair- man asserts that in spite of any difficulties that may lie ahead he has confidence in the future of the motor industry in general and BMC i° particular. For investors who are prepared '17) take the rough with the smooth by risking their money in motor manufacturers' shares, the BMC 5s. shares are as good as any at 15s. to yield, 6.6 per cent on the maintained dividend 0' 20 per cent.
Carreras have had a remarkably good trading year ending June 30, 1961, profits having riseo from £2.42 million to £3.03 million. The companY have enjoyed a full year's production from their new factory at Basildon, which is equipped with the most up-to-date cigarette-making machines. From here come the company's leading brands of cigarette, Piccadilly No. 1 and Guards filter tips and all the export requirements of their new acquisition, Rothman's, of Pall Moll. Carreras are also increasing their home sales, especially in filter-tipped cigarettes, in which they are exceptionally strong; these include menthol filters and king-size filter. The net profit after tax has improved from £872,479 t° £1,299,133- and includes more than was origin- ally expected from Rothman's Pall Mall. The unprofitable Canadian subsidiary has been dated. The chairman, Mr. Rupert, has done well for holders of the 2s. 6d. 'B' shares since Ills Rembrandt Tobacco Co. took control of their affairs three years ago. The cover for the 9 Per cent. dividend (stepped up by 1 per cent.) on the larger capital has increased to 221 per cent' The shares have moved up from a low point of 4s. lid. this year to their present price of 6s. 6d. At this level the yield is only 3.4 Per cent., but this seems justified as the future out' look appears to be far rosier than for many Years past, in spite of the chairman's rather dampening remarks about the current year's trading.
The property portfolio of the Haley bridge Investment Trust does not show much change for the year to June 30, 1961, but the property revenue is up by 13 per cent. to £364,721. The dividend income from investments has also in- creased from £85,827 to £122,035, but this is equal to a return of only 3,1 per cent. It does seem that the higher dividend (12 per cent. against 10 per cent.) has been made possible by a contribution from a finance subsidiary. There has been a larger charge for interest, but special ta-x allowances have to a certain extent offset these. It would be helpful to know from the chairman, Sir Aynsley Bridgland, what effect the tax allowances and income from the finance subsidiary will have on future company profits, Particularly as a number of its properties are in South Africa. The asset value of the £1 Shares (from, the balance sheet) is 65s. against the market price of 55s., at which they yield 4.3 per cent.
Last June Anglo Asian Rubber Plantations acquired Tong Hing and Sungei Tukong Estates by a rights issue of shards. The present accounts to. March 31, 1961, therefore include only nine months' trading profits of these two estates. When the rights issue was made it was hoped to pay a dividend of 15 per cent. this year, pro- vided the price of rubber did not fall. Unfor- ,tunately the price has fallen and in spite of an 111.otease in the output of the crop and a reduc- tion in costs, a drop in the net profit (after tax) ,.`ront £218,121, to £198,941 could not be avoided. nowever, the chairman, Mr. P. B. L. Coghlan, reels that the' company can expect' a further substantial yield as the young areas reach maturity and, with a further reduction in cots, 1.11eY will be able to Compete quite successfully 11 world markets if these remain Moderately stable. The'dividend is 71- per Cent. against 12-1 Per cent, and the 2s. shares arc now around Is. A report by the chairman, to be given at the annual general meeting on December 4, appeared in our last week's issue.
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