26 NOVEMBER 1937, Page 36

Venturers' Corner I must raise a protest against the board

of ...Dent, Alleroft and Co., the glove makers, not for bringing an inequitable recon- struction scheme—on balance I think it is a beast, but a. just beast—but for submitting it to shareholders without sufficient corroborative data. It is obvious that the board would not have formulated a scheme at all.without first assuring them- selves that they could anticipate a certain level- of profit's. Why, then, not tell the shareholders what this basic- estiniate is, so that they may have the same data to go on as the bgard had in deciding whether to give the scheme their support ? If the reply is that this information will be given at the forth- coming meeting, my view still holds, since the proper time to give shareholders such a piece of cardinal information as the probable level of profits is when the scheme is first submitted for their consideration.

The proposal to write down' the Li preference shares to 14s. and then to convert them into ordinary shares is unex- pectedly drastic, but no snore so than seems to, be necessary to put the assets on a conservative basis. If the scheme goes through, as I anticipate, a holder of Too existing Li preferences will become possessed of 35o new 4.s. ordinaries. What will the new ordinaries be worth ? Until the earnings estimate is announced it is impossible to tell, but I strongly advise holders of the preferences not to sell at today's depressed price of 8s. That is the equivalent of valuing the new 4s. ordinaries at only a little over 2S. each, which could only be justified if earn- ings fell to some Lio,000. With the benefits of internal re- organisation still to be reaped, a profit level of at least £20,003 should be practicable. As a speculation for eventual recovery Dent, Allcroft preferences around 8s. should be worth putting away. Cu [Readers' enquiries, or requests for advice regarding' particular shares, will be answered periodically as space permits. Correspon- dents who do not desire their names to appear should append

initials or a pseudonym to their questions.] - — -