Venturers' Corner
Here is a preference share, for the venturesome, which is now paying its regular dividend and holds out some promise of gradually clearing off its arrears. The 7f per cent. cumu- lative participating £i preferences of Burberrys, the weather- proof garment makers, are quoted at 17s. 9d., which includes 2S. 9d. net of arrears still outstanding dating back to May, 1935. During the past four years this company has been consolidating its recovery. In 2935 the net profit was £70,00o ; the latest figures, for the year ended March 31st, 1937, show a net balance of £129,993, which covers the 71 per cent. preference dividend nearly twice. If one ignores the arrears, which are now being paid off as and when earnings become available for the purpose, the shares yield 81 per cent.
Even allowing for the up-and-down nature of this type of business and the company's dependence on oversea markets in which trading conditions are still very difficult, I think the risk is adequately matched by the high yield. The balance- sheet position is reasonably strong and in the home market, at any rate, the company should get its share of increased spending power. Net liquid asset at March 31st amounted to £417,000, and although goodwill is carried at the high figure of £447,000, this intangible asset is covered as to £271,000 by reserve. These preferences look good to hold for a generous income return and a modest rise in price. CUSTOS.
[Readers' enquiries, or requests for advice, regarding particular shares will be answered periodically in print or by letter. Corre- spondents who do not desire their names to appear should append initials or a pseudonym to their questions.]
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