3 SEPTEMBER 1937, Page 32


About- the middle of the month the annual accounts will appear of E. W. Tarry & Co., the old-established mining and agricultural machinery makers in South Africa. I do not know whether the board will see fit to resume dividends on the ordinary £11 shares, but at 26s. they seem to me to oar' good value for money. Within the past year the company has declared four years' preference dividends, thus wiping the slate clean of all arrears, and as there is no large excess of cash out of which these payments might have been made, I think it is a fair deduction that earnings have been running at a high level. With its business well spread throughout Northern Rhodesia, where mining activity must be creating fresh demands for capital goods, the company is obviously in a position to stage a strong recovery.

The interesting point is that the net profit for the year ended March 31st, 1936, was sufficient, after allowing for one year's preference dividend, to leave. a balance equivalent to 25 per cent. on the ordinary' capital. Even if the company did no better in the year to March 31st, 1937, the indicated earnings on the LI ordinaries, with no preference arrears in front of them,* therefore 25 per cent. in relation to a price of 268., giving ail earnings yield of nearly 20 per cent. Until reserves have been strengthened the company will doubtless be modest in ,its dividend distributions, but it will be surprising if ordinary dividends ate reaumed With les:s than 5'Per teat." -With "a prospect of substantially larger distributions ahead, the ordinary shares should have scope for a gradual rise in price.