LANCASHIRE STEEL PROGRESS
It is apparent from Mr. John E. James's review at the meet- ing of the Lancashire Steel Corporation that this important group has advanced another stage in its process of technical and financial consolidation despite the difficult conditions of 1939. Shareholders were reminded that the effects of the transition from peace to war have not yet been fully ex- perienced, and it is made clear that last year's increase in earnings was based on a large expansion of turnover and not on any increase in the profit margin. Indeed, Mr. James emphasised that the higher costs of raw materials and the rise in other trading charges were not paralleled by corre- sponding adjustments in the prices of finished steel.
As has already been announced, the Corporation has main- tained its Ordinary dividend at 7 p.c. and now that these shares have been placed on what seems a relatively firm dividend-paying basis, the question naturally arises whether the stage has not been reached when the Bank of England might seek to transfer its holding to the investing public. Preliminary soundings as to the market possibilities in this direction have taken place, but no basis for the deal has yet been agreed. If and when such an operation is carried through one would expect that it would include the substantial hold- ings of Lancashire Steel Ordinary shares now in the posses- sion of the Partington Steel and Iron Co. and the Pearson and Knowles Steel and Iron Co. Those two undertakings would then be placed in a position in which they could repay their heavy bank indebtedness and possibly make a return of capital to their shareholders.
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