COMPANY NOTES
By CUSTOS NA-Easter feeling in Throgmorton Street
as uninspired as the weather, except in the 1'edged market which goes from strength to ja'ength. The irredeemables were prominent, c-,,TIclY because of a shortage of stock, and 3+ per 6;11,1. War Loan jumped to 671, compared with at the end a the month. This stock goes 'ex lviciend' on April '5 and the current yield is 14,6s. 3d. per cent. If Bank rate is to come down at Per cent. before long, War Loan should stand at the end a the month. This stock goes 'ex lviciend' on April '5 and the current yield is 14,6s. 3d. per cent. If Bank rate is to come down at Per cent. before long, War Loan should stand 10 at least. Industrial shares were improved on thedifesday. UNILEVER, however, fell slightly on ue report. An international giant combine like ofrt4ver will always be the first to feel the draught t„ 4 World trade recession. The report states that i'L'Iwards the end of 1957 'industrial activity had nr,,ea(1Y begun to slacken both in North America ,;`' In many countries of Western Europe and the expansion of international trade had clearly been 10eCked.' In the circumstances the group did well teI!nerease the money value of its turnover by 3 cent. to £1,720 million, but profit margins fell 41111 turnover from 2.9 per cent. to 2.4 per cent. d on capital employed from 10.2 per cent. to 8.2 1, , cent.-and as a result net trading profits fell by ri Per cent. to £851 million. (These do not in- autide the Indonesian subsidiary, ices which is in thsPense.) The fall in commodity pr 'has been upsetting factor, but confidence in the future e,exPressed by the continuing high rate of capital fr Venditure. Net quick assets have fallen sharply 0°,111 the 'unusually high' figure of £47 million to r„- million, but these are sufficient to meet capital .,,quirements in 1958. At 73s. 9d. the shares of oufnilever Ltd. return 4.65 per cent. on the dividend 011171 per cent., covered over 4 times by earnings att % per cent., but this is hardly good enough to b, ract buyers. Turnings
Turning now to a domestic
.nusinr, LONDON BRICK reported a good recovery .10 Profits with earnings on the equity amounting s,291- per cent. and covering the dividend of Per cent, on the present capital nearly twice. At le s. the shares now yield 7.85 per cent. As a fall In building output is expected the shares may come back but for an income fund they would then be an attractive purchase.
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hilt is thought in the City that the coming Finance will introduce restrictions upon the formation ,ond trading of hire-purchase finance companies. Apparently any finance company which is not technically a bank can advertise for public deposit money and so defeat Mr. Amory's credit squeeze. the success which has been obtained in attracting money from the public by the offer of high interest rates-up till' recently 8# per cent. and over-is well illustrated by the Lombard Banking group whose current, deposit and other accounts .rose last year from £7.8 to £18.6 million. There is no doubt that the joint stock banks have been losing a lot of businessto the new hire-purchase finance companies and as soon as the Government pro- posals are known I would expect the -banks to make a move towards.acquiring minority or con- trolling interests in some of the leading companies. In 1954 the .Gommercial Bank of 'Scotland acquired two prosperous hire-purchase finance companies, and now that this bank has merged with the National Bank of Scotland, in which Lloyds have a large share interest, it may he said that one of the English joint stock 'banks has already made a start. I do not suppose:that the independent Mr. Gibson Jarvie will allow UNITED DOMINIONS TRUST to come within any bank's orbit, but MERCANTILE CREDIT might be more accom- modating. especially when it wants further capital for development. I recommended these 5s. shares on December .13 when I drew attention to Lloyds' indirect interest in Scottish hire-purchase finance. They were then 27s. 6d. cum 100 per cent. scrip bonus. They are now quoted at 14s. to yield 4.9 per cent. on the assumed 131 per cent. dividend. The shares arc not easy to buy but are worth trying for.
* * * The gold finance houses are at last beginning to reap the benefit of the expensive development of the new Orange Free State and Far West Rand goldfields which has been going on for the past thirteen years. A firm of London stockbrokers in
an interesting report estimates that the twenty mines in these 'fields have raised about £217 mil- lion of new money. Their total expenditure on gold production has exceeded £254 million, not including £37 million spent on the production ,of uranium. The dividends paid by the twenty mines have risen from £31 million in 1955 to £191 mil- lion in 1957, and for 1958 and 1959 are estimated at. £24.1 and £28.f million respectively. The last accounts of the gold !finance houses ,generally in- clude only the 1956 dividends, which amounted to £9.8 million, so that we may expect their revenues from this source almost to treble in three years' i me. The•ANGLO-AMERICAN CORPORATION OF SOUTIt AFRICA (the Oppenheimer, group) has been the leading finance house in this vast development of South African gold, and:the .market was therefore pleased to see that its income last year-on the basis of the 1956 gold dividends only-rose from £4.4 to nearly £5 million. The -final dividend was increased by Is. to 6s., making 8s. for the year, payable on capital increased by the 10 per cent. scrip issue of last year and by the offer to acquire a further holding in African and European (giving an 86 percent. control of that company). For the next few years shareholders can look forward to further increases in the dividend and 1 therefore consider the shares at the,present.price of 127s. 6d. to yield 6.35 per cent, still. attractive. Even after the recent rise the shares are still only half-way between their high and low of last year. It would not be surprising to 'see the price move gradually towards the conversion price 'fixed for the Con- vertible 'Notes for 1958 to 1962, which was just below 154s.
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