The chances of a further rise in profits seem to
me to be very good indeed. For the year ended March 31st, 1938, the total income has risen by £69,458 to £867,609, which is equivalent, after allowing for all prior charges, to about 71 per cent. on the ordinary capital as it will stand after the scrip bonus distribution. From now on the group should begin to reap some of the advantages of the consolida- tion policy so consistently pursued over a long period of years, quite apart from the normal benefits of growing demand. It should not be too optimistic, therefore, to look for earnings of, say, 8 per cent. on the larger capital in the current financial year, out of which the board might feel justified in paying a dividend of 6i per cent.
At 38s. 6d. Edmundsons Li Ordinaries are still cum the so per cent. scrip bonus. On an ex bonus basis the price would be roughly 25s. 9d., yielding roughly £4 I2S. 6d. on a 6 per cent. dividend and just over 5 per cent. if the board decides to raise the rate by -1 per cent. These yields are attractive in relation to those offered on the Ordinary shares of other supply companies with less scope for expansion.
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