L.M.S. EXPENDITURE
Where the Southern has led Euston has not lagged far be- hind. L.M.S. 4 per cent. First Preference and the 5 per cent. Redeemable Preference stocks are, after all, to have their full dividends and, what is more, these payments are covered by earnings. Like the Southern, the L.M.S. has sprung a sur- prise in its expenditure figure for the second half of the year; in fact, the company's experience has been quite re- markable. Whereas in the first half of 1938 expenditure was up by £537,000, the figure for the whole year was actually £340,000 lower, which means that there was a decrease of £877,000 between July and December. On this subject the company's statement tells us that working ex- penses "reflect on the one hand a further increase in rates of wages and prices of materials of approximately L1,400,000 and on the other a saving of approximately £1,740,000, due to the smaller volume of business and the further fructifi- cation of economies in working."
As a result of this magnificent achievement on the expen- diture side, net revenue, at £11,345,000, has fallen by just over £3,000,000, or by roughly £500,000 less than most estimates. The 1923 preference and the ordinary stock are to go without dividends, but that misfortune has long been accepted as unavoidable. What of the outlook? Unfor- tunately, gross traffics to date this year have shown a further heavy f9l1 which cannot be more than partially offset by reduced expenditure. As a preference holder, however, I should be prepared to see things through in the hope of a recovery later on from today's low prices. At 481 L.M.S. First Preference yields, like Southern Preferred, over 81 per cent. It should not be sold.
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