FINANCE AND INVESTMENT
By CUSTOS
WHAT with the steady flow of encouraging war news and the prospect of further substantial repayments of debt by our overseas creditors, it is not surprising that markets should have resumed their advance. The significant fact, nevertheless, is that the rise is becoming more and more selective. There is no insistent buying, for example, of the " blue chips " of the industrial market now yielding a mere 3} to 41 per cent. Nor is there any sustained improvement in long- dated gilt-edged stocks. These two groups, closely tied to each other by relative yields, are holding their ground ; but the search is for higher-than-average yields, for shares offering little or no im- mediate income but with good post-war prospects and for frank speculations. In such conditions it is obvid'usly wise to watch one's step, even though the trend will almost certainly continue to be upward for some time yet.
GAUMONT-BRITISH TAXES From the full accounts of Gaumont-British Picture Corporation it is clear that taxation was mainly responsible for the mere main- tenance of the 6 per cent. dividend. Although the group's profits rose by £355,802 to a new record of £2,747,347, provision for E.P.T. and N.D.C. was up from £502,239 to £735,562 and the income-. tax charge was £808,811 against £573,493. In his statement, Mr. J. Arthur Rank holds out some hope of E.P.T. concessions, and he also indicates that internal consolidation may bring savings. This year's results can therefore be awaited with considerable confidence. At 16s. 3d. the los. ordinaries are worth holding.
STORES DEALS CRITICISM
Consolidated profits of the Great Universal Stores group fulfil the highest expectations, but I doubt whether shareholders will welcome the news, given in the latest accounts, that transactions involving as much as £544,000 have been entered into between the company and various directors. While it is only right that the board should call attention to these deals and to the fact that they have yielded " large profits " to the vendors, shareholders are entitled to know much more than has so far been vouchsafed to them. The whole question of dealings between directors and, their companies is one which needs the closest scrutiny. I hope that Great Universal shareholders will insist at the annual meeting on a full account of the transactions now disclosed.
AVELING-BARFORD YIELD Among the smaller companies which are now increasing their capital, Aveling-Barford, the Grantham manufacturers of road machinery and road contractors' plant, are well placed in relation to post-war as well as war requirements. On the so per cent. tax free rate. of dividend now in force the 5s. ordinary shares 'at 18s. offer a yield of over 51- per cent., less tax, which looks reasonable enough in view of the ample earnings cover and the post-war prospects. At present very large sums are being paid over to the Government in E.P.T., but there should be plenty of scope for higher dividends when the tax burden is reduced. This is a company whose issued capital is small in relation to the volume of business handled, and I shall not be surprised to see further issues on advantageous terms as time goes on. The shares are worth locking away for yield and capital appreciation.
Any readers who would be willing to post their copies of THE SPECTATOR to Service men can be supplied by Miss A. Hamilton, The Polytechnic, 309, Regent Street, W.x, with names of soldiers, sailors or airmen who would welcome copies.
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