24 JANUARY 1964, Page 27

Company Notes

By LOTHBURY rrtiE chairman of Peachey Property states that I the political threats to residential landlords are most exaggerated. The company is rapidly building up its commercial property interests and is reducing its residential (short-lease) property investments. Last year the company pur- chased shops to the value of £550,000 and has now arranged the purchase of shops and offices to the value of £21 million. The net profit of £600,000 for the year ended June 24, 1963, just covered the 18 per cent dividend. Investors must take a medium-term view of the company.'s pros- pects, which I consider are promising. The 5s. shares at I2s., yielding just over 7 per, cent, look undervalued.

The market had been expecting something good from Woolworths--it was not disappointed, although the price of the shares had moved (owing to profit-taking) slightly downwards. Pre- tax profits have risen by 71 per cent to £37.6 million; properties have been revalued, realising a surplus of £35.9 million, so the company is capitalising £47; million of reserves to make a one-for-one scrip issue. The dividend is in- creased by 21 per cent to 40 per cent. The 5s. shares, now 63s. 9d., have conic up from a low point of 45s. in 1963 and are a fine invest- ment, yielding 3.2 per cent, with excellent prospects.

Splendid results come from the Leyland Motor Corporation for the year to September 30, 1963, with a 46 per cent rise in group profit to £17.6 million and an 83 per cent rise in the net. profit at £5.82 million. With a final of 17.5 per cent, the total dividend is lifted by 21 per cent to 22- per cent, more than twice covered by earnings. Sales of the Triumph new '2000' model are going well. Benefit must also have been derived from the merger with ACV and we know that exports (which account for over 60 per cent of the total output) are still rising—as witness the large (and controversial) order for buses from Cuba. It looks as if the time is near to fund part of the heavy bank loans of £15.6 million. The LI shares at 99s., yielding 4.6 per cent, are the best in this field of investment.

As forecast, Northern Dairies is paying a final dividend of 5 per cent, thus maintaining a 10 per cent total on the capital increased by a one- for-five scrip issue for the year ended Septem- ber 30; 1963. A scrip issue of two-for-five is now Proposed. This fast-expanding group increased its net profit from £399,000 to £453,000. The group derives its profits as to 40 per cent from retailing and processing, with 30 per cent from manufac- turing butter, cheese and chocolate and ,30 per cent ice-cream, hire-purchase and engineering. I Would expect the company to follow the usual Practice of maintaining the 10 per cent dividend on the increased capital, in which case the 5s. shares at 26s. 9d. would yield 2.5 per cent against the current yield of 1.8 per cent. A fine share for the patient investor.