BRITISH ALUMINIUM POSITION
At the hnnual meeting of the British Aluminium Co., Mr. R. W. Cooper, the chairman, disclosed details of the contract under which this company has sold the whole of its 1940 output to the Ministry of Supply. These arrange- ment, it seems, are subject to renewal at the end of the year, and the price is based on the level current before war broke out. It appears, therefore, that stockholders can look forward with confidence to satisfactory profits and dividends; but it also seems unlikely that the rate will be stepped up from the 12+ per cent. level which has been amply covered in each of the past three years. Obviously, expanding output is going to involve fairly heavy capital expenditure and it will be the board's policy in present conditions to finance expansion out of the company's resources without further appeals to stockholders or the investing public.
On a long view this company's earnings will undoubtedly justify a larger distribution to stockholders and I expect that, when the more urgent calls for capital expenditure have been met, the board will feel justified in bringing the issued capital into closer relationship with the real value of the assets employed. For this purpose ample reserves are already available, which explains the low apparent yield on the Li ordinary units now quoted at 53s. 9d. In present conditions a return of under 4T3,- per cent. on an equity share may not seem generous, but in this case it is a fair measure of the long-term possibilities.
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