27 NOVEMBER 1959, Page 51


LAXO LABORATORIES, while only show-

"ing a small increase in the group trading profit, are able to report an increase in the net profit, after tax, of over £400,000 for the year ended June 30, 1959. After transfers to reserves totalling £1,600,000 it is proposed to pay a final dividend of 81 per cent. making 14 per cent., which compares with an equivalent of 113 per cent. after allowing for the capital increase last year. The chairman, Sir Harry Jephcott, advises that in export markets the deterioration in trading conditions was severe and widespread, for whereas in the past the export sales of the parent company and its overseas sub- sidiaries amounted to two-thirds of the total turn- over, this year, for the first time, the home sales have contributed more than half the total turn- over and profitability. However, since the begin- ning of 1959 the overall position is better and the parent company's trading position has been improved by the introduction of several new pro- ducts, such as Grisovin—an antibiotic. The reserve for research and development has been doubled at £1,200,000. This great organisation now embraces Allen and Hanbury's and The Murphy Chemical Co. The turnover of the Glaxo overseas subsidiaries is seven times what it was in 1945. The amazing growth of this company with an issued capital of nearly 10 million, has possibly exceeded that of any other company this century. Those who bought shares (and retained them) a decade ago have multiplied their capital many times and although the lOs. stock units now stand at 60s. to yield only 2.3 per cent. they cannot be sold even though their future growth may not be as startling as their past.

Allied Bakeries is another example of a growth stock with a consequently very low yield for its shares. The company, controlled as it is by the chairman, Mr. Garfield Weston, has over the years treated shareholders well, having rapidly expanded its now very large business, mainly from its own resources through retained profits. In spite of increasing competition, profits for the year to April 1, 1959, have been well maintained, the trading profit being up by 15 per cent. at £11.3 million and the net profit, after tax, increasing from £2,843,000 to £3,290,000. Last year the capi- tal was doubled by a scrip issue and was further increased earlier this year by a rights issue. Capital commitments for the current year are again expected to be heavy and are as before being partly financed by bank overdrafts. Profit retentions have always been considerable, the earnings cover being 44.3 per cent. for the dividend of 18 per cent.,. which again (as in several years past) was an increase. The 5s. ordinary 'A' shares at 35s. 6d. yield 2.5 per cent.

Aberforth Property Investment is the name given to the company formerly known as The Aberdeen Cemetery Company, and, as the new name suggests, the company has entirely changed its objects and interests. Since March of this year the authorised capital was increased to £500,000 and the £1 shares were split into 2s. ordinary shares and the issued capital became £100,000. It is now proposed to increase the authorised capital to LI million; to make a bonus issue of two fully- paid ordinary shares for every one held, and also to change the name of the company to Aberforth Holdings Limited. The past accounts to June 30, 1959, naturally only reflect the affairs of the old company. Assets recently acquired are G. and C. Finance Corporation, a hire-purchase Company with an issued capital of £500,000; factories at Reading .and various freehold and leasehold shop properties in London, known. as Riverside Drive and Other Properties, Roker Industrial Estate—factories at Oldham, and Naismith and Scott Limited owning a retail store at Paisley. An estimated gross income has been given for all these acquisitions; but shareholders will look forward, at the forthcoming annual general meeting, to hear from the chairman (who was appointed in July), Mr. G. F. Corber, exactly what they can expect during the current year and what plans the directors may have for extending the company's interests. It is intended to pay an interim dividend of 5 per cent. in January next and a total of not less than 121 per cent. On that basis the 2s. ordinary shares at 16s. yield only 1.5 per cent.

Malayalam Plantations have returned a profit, after tax, of £336,597 for the year to March 31, 1959, compared with £332,910 for the previous year. The chairman, Mr. H. W. Horner, reports that taxation remains at a penal level. Unfortu- nately during the current year exceptionally adverse weather affected the intake of tea crops, but the estimated crop of about seven million pounds of rubber should be secured. It would seem that the company, so well managed by the agents, Harrisons and Crosfield, has successfully overcome its difficulties. Current liabilities are more than taken care of by a very substantial amount in reserves, so that shareholders can gain assurance for the future from the strong balanCe sheet. The ordinary shares at 28s. 6d. yield 13.9 per cent. on the 20 per cent. dividend.

Bekoh Consolidated Rubber has again restored the dividend rate to 10 per cent. for the year to March 31, 1959—it was 5 per cent. in 1958 and 1956 and 10 per cent. in 1957. The total crop of rubber was 18 per cent. up on that of last year and that for this year is expected to be increased at around 2f million lb. Only about 10 per cent. of this crop has been sold forward at 30d. a lb. so that the company stands to benefit by selling the bulk of its crop in the UK at present peak prices. Estate costs fell last year and the net profit before tax was £48,811 against £28,228; this year should be considerably better, although of course there will be a higher tax charge. The 21- ordinary shares at 2s. 6d. yield 8 per cent.