Venturers' Corner My recent remarks on the speculative merits of
the preference and ordinary shares of the Francois Cementation Company are fully confirmed by the annual accounts. For the year ended March 31 net profits rose from £28031 to £36,463, and, allowing for the fact that the preference shares only ranked for six weeks' dividend, the 15 per cent. ordinary distribution has been paid out of as ailable earnings of nearly 40 per cent. Even if a full year's preference dividend had been chargeable, ordinary earnings would have been over 20 per cent. At 14s. the 6 per cent. cumulative kr preferences, with their dividend covered about three times, are yielding over 81 per cent., while the is. ordinaries, standing at Is. 5d. x.d., offer a return of over to per cent. These are high yields which must be considered as tempting unless there is some " snag " in the outlook.
My own feeling is that the shares are under-valued, especially the preferences, on which the dividend ought to be reasonably safe now that the company's capital and business have been reorganised. This impression is strengthened by Mr. Harry Clayton's review at the annual meeting. At home, he stated, the subsidiaries have done well, all having made profits with the exception of the Granitese Company. This undertaking is still in a partial development stage, but is showing improvement. As for the immediate prospect, Mr. Clayton intimated that the new financial year had opened with a largely increased amount of work, with the result that the company was busy and anticipated remaining so "for some good period." It seems a safe assumption, in these conditions, that profits for the current year will be well maintained. CUSTOS.
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