10 FEBRUARY 1961, Page 34

Company Notes

NORTHERN DAIRIES continues its pro- gramme of expansion with most encour- aging results. Five new companies joined the group in 1959-60 but, apart from the dairy business, it now has interests in a hire-purchase finance company, agricultural engineering com- panies and chocolate-manufacturing, and other diversifications may be made, says the chairman, Mr. A. S. Horsley. Pre-tax profits for the year to September 30, 1960, have risen from £394,403 to £454,621. Last year a 10 per cent. dividend was paid with a 100 per cent. scrip issue; this year the dividend is again 10 per cent. plus a 5 per cent. scrip issue. The chairman advises that in future he intends to make a small scrip issue each year and that he will maintain the dividend on the increased capital. With such a growth poten- tial and a 31 times cover for the dividend, it is not surprising to find that the 5s. ordinary shares at 23s. yield as little as 2.4 per cent. They deserve their high rating.

Shareholders of Castlefield (Kiang) Rubber (a member of the Harrisons and Crosfield Group) are now reaping the reward of the directors' long- term re-planting programme. The average output from the estates has increased by 7 per cent. each year over the past five years and a greater in- crease is expected in the future. Replanting costs have been provided for out of profits. These, for the year to June 30, 1960, rose from £98,098 to £152,078 (before tax), the net price received for rubber being 29d. per lb. for 1959-60 against 22.3d. per lb. Of course this year revenue will be lower, which will be partly offset by lower costs, but it may not be wise to count on the well- covered dividend being maintained at 45 per cent., to which rate it has been raised, against 35 per cent. for the previous year. However, the company's financial position is particularly strong; general reserves now stand at £300,500 and total reserves at £414,000, which is more than twice the amount of issued ordinary capital. Even if the dividend should be reduced, the 2s. ordinary shares at 5s. 6d. must be good value as a rubber investment.

This is the time of the year when building societies announce their 1960 results. The third largest in the country, The Co-operative Per- manent, has controlled its expansion during the past year by the restriction of advertising and postponing the opening of new branches. In doing so it has been possible to increase its gross reserve ratio from 2.9 per cent. to 3.4 per cent. during the year. In terms of the formula laid down by the Chief Registrar of Friendly Societies, it means that the ratio rose from 2.4 per cent. to 2.7 per cent. Loans were granted for the pur- chase of over 22,000 private dwelling houses for owner occupation. Receipts from investors were slightly lower, but the Society's liquid assets re- main exceptionally strong at £40.3 million or 16.8 per cent, of total assets, which now exceed £239 million.