21 FEBRUARY 1964, Page 32

Company Notes


ir LIKE the summing-up by the chairman ot IPolycell Holdings, Mr. F. S. Smith, in his annual report to shareholders, that his board of directors are concentrating on the promotion of `do it yourself' products for which adequate finance and factory space is available. The group increased its trading profits from £626,626 to £853,827 for the year ended September 30, 1963, and the net profit was up from £304,880 to £367,605. The dividend, held at 20 per cent for the past three years, is now stepped up to 274 per cent. In the past year the group spent £456,000 on capital account: future commitments are down to £107,000. The company now has a subsidiary company in New Zealand and an associate company in Canada. The ceramics division is making a profitable contribution. This year will see the launching of further new pro- ducts which in time will be profit-earning. In- vestors have rightly classified this share as a growth stock. It still is. The Is. shares at 8s.. 9d., yielding 3.3 per cent on the 271 per cent divi- dend covered 2.2 times by earnings, still have scope for further appreciation.

Since 1960 the trading profits of the Pullin Group of electrical engineers and scientific in- strument manufacturers have declined, but for the year ended September 30, 1963, they have improved from £311,671 to £338,776 and the net profit from £99,529 to £116,187. The dividend is maintained at 174 per cent. The recent acquisition in the photographic field of Northgate (Cameras) has produced valuable Japanese agencies, which are expected to produce larger profits. The com- pany now proposes to issue £500,000 of un- secured convertible loan stock to fund bank overdrafts, on terms to be announced later. It is proposed to make a one-for-one scrip issue and on the doubled capital a dividend of 9 per cent is forecast. The company has a good volume of orders on hand for government departments. The 2s. shares at 6s. 3d. are giving a good return of 51 per cent and it remains to be seen whether future expansion will further increase profits and so make it possible to pay a higher rate of dividend.

We shall have to wait for the annual general meeting of the Monotype Corporation to hear from the chairman, Sir George Harvie-Watt, as to future prospects. Profits after tax were better at £448,726 against £400,160 for the year ended September 30, 1963, and the dividend is in- creased from 6 per cent to 7 per cent. The group should benefit from its new development in film- setting machinery. In this connection a new in- structional training centre was opened in London last year. This has been an unexciting investment but now has scope for advancement, as the £1 shares at 37s. 6d. with the dividend 21 times covered, promise another increase in the divi- dend, to justify the rather low yield of 34 per cent.

Bird and Company (South Africa) has doubled its first interim dividend at 8 per cent and has declared a bonus of 2 per cent for the year end- ing June 30, 1964. This is payable on capital of ' £1,129,500 now doubled by a one-for-one scrip issue on which the board has forecast higher dividends. The total dividend for 1962-63 was 10 per cent. Half-yearly profits are estimated at not less than £300,000. For the past three years the company has not paid any tax, but in future may do so and will have to pay an extra (esti- mated) £100,000 export tax on sisal. If a total dividend of 12 per cent is assumed, which is a reasonable guess, the 5s. shares at 7s. 6d. could prove to be a good gamble to yield 144 per cent.

Trust Houses, the large hotel group, which last November acquired Grosvenor House (Park Lane), is going to raise £61 million; £31 million,. by debenture issue will be used to pay off £492,000 of debenture stock and refund bank overdrafts and the balance will be offered to shareholders as a rights issue to provide additional working capital. The dividend for the year ended October 31, 1963, is 124 per cent. Group profits before tax, including seven months from Grosvenor House and four months from Iberian and Mediterranean Hotels, amounted to £1,404,883 against £910,644. This is a strong and progressive group in the hotel business. The £1 shares at 64s. 3d. look attractive cum the . pending rights issue.