FINANCE AND INVESTMENT
By CUSTOS
IT is just as well, perhaps, that the investing public as a whole not yet prepared to follow the lead of the more optimistic sp in the City and join in the search for post-war recovery shares. E the launching of the large-scale air offensive against Germany failed to stimulate any substantial volume of buying. What it done, however, is to confirm holders in their decision to see th through and not part with shares on the first signs of an impro ment. So we have even a modest demand unmatched by sales, w the inevitable accompaniment of rising quotations. What will hap if and when the public decide that the time has come to look ah and buy for post-war prospects it is easy to see. There will wild scramble at rapidly rising prices, and many will get in at wrong price.
DUNLOP RUBBER POSITION
It is a striking indication of the investor's confidence in the finan strength and long-term earnings prospects of the Dunlop Ru Co. that the chairman's sober review of the immediate outlook sh be followed by a rise of from 27s. to 28s. 3d. in the ordinary units. Sir George Beharrel tells stockholders quite plainly recent events in the Far East must react adversely on earning po Important trading assets, including the large plantations in Mala have been lost, and the group's activities will be governed from by the extent of available supplies of raw material. It is obvi that there must be a fairly substantial reduction in total sales.
Against these adverse factors must be set the company's imme financial strength, which is brought out clearly in an admirab presented set of accounts, the importance of the group's output relation to the war effort, the cushion afforded by E.P.T., and excellent post-war prospects. All in all, the LI units look g value for money yielding about 51 per cent, on the 8 per c dividend.
MARKS AND SPENCER'S TAXES
A good illustration of the cushioning effect of E.P.T. is prov in the Marks and Spencer results for the year to March 31st, 1 Net trading profit was down from £3,045,898 to £2,202,272, the transfer to taxation reserve was reduced even more sharply fr £1,519,96t to £472,994. In consequence, the amount available, making provision for taxation, was £2o4,7o3 higher than in the p ceding year, and the ordinary dividend has been comfortably h at 35 per cent. Mr. Simon Marks warns stockholders that they in be prepared for a further contraction in trading profits. Sales the home and export markets are decreasing, the company's co footage has been reduced by nearly one-half and the staff cut d correspondingly. A fall from £I,999,68o to £1,279,389 in the s in-trade item in a period of sharply rising values tells its own t All the same, I doubt whether, in view of the E.P.T. position, company will be compelled to reduce its dividend really drastica
SHELL DIVIDEND MAINTAINED
Having proved a very disappointing war-time " hedge," lea oil shares are now putting up a much better performance as war recovery holdings. Shells, which touched 38s. 9d. at one last year, have moved up to 5os., and look like regaining more gr on the strength of the dividend just announced. Some of pessimists would not have been surprised if the 24 per cent. free interim had proved to be the total for 1947. Instead, there final of 24 per cent., which brings up the rate to 5 per cent., tax f as in 1940.
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