20 OCTOBER 1967, Page 25

Market report

CUSTOS

The equity shares markets are still in a down- ward consolidation phase after their recent fantastic rise. The setback is moderate, for good company reports are sustaining the market. For example, after the brilliant results last week of William Press and Brooke Bond, Marks and Spencer turned in an excellent in- terim report with profits before tax 5 per cent up in spite of the heavy burden of SET, higher rates and NW contributions. As one commen- tator put it, MARKS AND SPENCER still has the edge on BRITISH HOME STORES. Another fine interim report came from Asneys. Pre-tax profits for the year are forecast at £1 million against £655,000 in the previous year. The divi- dend goes up to 12 per cent against 9.68 per cent. The shares have risen this year from a 'low' of 9s 94d to 15s 6d to yield 3.9 per cent with a price/earnings ratio of 19.7. This has brought the 71 per cent convertible loan stock up to 117, 50 per cent being convertible in 1969 into 170 shares.

A few equity groups are diverging from the upward trend. Paper shares have been ad- versely affected by the Finnish devaluation. Brewery shares have been affected by the drop in sales following the breathalyser tests, which the breweries estimate at 10 per cent for the next six months and thereafter 5 per cent for the following six months.

Oil shares have been resisting the present reaction. Burnish WI was partly responsible by declaring an interim dividend of Is 3d against Is 2d last year. It has undertaken to pass on by way of a second interim payment any BP interim dividend which may yet be paid. Assuming the repetition of the 3s dividend rate for 1966 the shares return a yield of 5.5 per

cent at the present price of 54s 6d. They would seem to be a safer holding than BP.

The gilt-edged market is flat being under the cloud of rising interest rates in America. The weekly offering of three months us Treasury bills rose this week to 4.67 per cent from 4.56 per cent. The Federal Reserve is still main- taining its easy money policy and while it does so the market is hoping that the rise in rates will be kept within reasonable bounds. A rise in our Bank rate will be avoided for the time being. It is touch and go.

Company notes

Sir Bernard Waley-Cohen, chairman of Simo Properties, is another chairman to speak of a `difficult year,' but reports higher profits and expresses confidence for the long term. During the year the company took over PIC (Property Investments Consolidation). Profit before tax is £365,277 against a total of £303,733 from the two companies in the previous year. Assets have risen to £21,340,144, against a figure of £18,696,398 for the two companies.

The Adwest Group's healthy figures—the profit before tax rose from £692,469 to £804,478—owe most to the ligh.t engineering side. For the last two years it has contributed 19 per cent of the sales, but its share of the profit has risen from 22 to 32 per cent. Mr F. V. Waller expects that the plan to redevelop Woodley Aerodrome (near Reading) in .con- junction with Town and City Properties will be given planning permission 'in the near future.'

The Anglo-Thai Corporation, merchants and agents in the Far East, gained (reports Sir Denys Lowson) from the American military presence in Thailand. The 45,000 us troops there, and the military aid programme, have brought prosperity which is reflected in the company's figures. Group profit is up from £583,272 to £666,230. Sir Denys states that the group's contribution to British exports again exceeded £5 million.