FINANCIAL NOTES
OCTOBER- UNEMPLOYMENT ONCE again the monthly unemployment figures are inconclusive. The decline of 17,000 to 1,781,000 in the total live register is less than the seasonal improvement in the coal and steel industries ought to provide. In some industries, notably building, catering and printing, there has been a pronounced deterioration during October. Nevertheless, we ought not to conclude that the recession has deepened. The count was taken on October 17th and we are dealing with the after- math of Munich rather than with the state of trade. The count appears to have fallen at a point when most of the exceptional work which the crisis created had stopped ; the trench diggers had returned to unemployment. But the abrupt check which overtook the building industry remained in operation. The premature end of the holiday season left its marks on the hotel and catering trades and the decline of advertising was still affecting printing. It is worth notice that some other trades are showing moderate signs of recovery. General engineering and motor engineering are outstanding. Wool is doing rather better and the very great apparent improve- ment in the cotton textile industry contains an element of better trade although it represents mainly the return of opera- tives from holidays.
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THORNYC:ROFT'S RECOVERY John I. Thomycroft, the marine and motor engineers, have continued the remarkable recovery they started last year. Net profit for the year ended July Ng rose by £50,584 to £160,006. Motor vehicle sales, of which 27 per cent. are export business, rose substantially ; marine motor and motor boat sales, of which 68 per cent, are for export, increased by over 6o per cent. The company still has in hand an im- pressive list of vessels under construction, chiefly for the British and Brazilian Governments. A year ago the company cleared away six years' arrears of dividend on the 6 per cent. preference capital, so that the way was open for the payment of dividends on the 71 per cent. Participating Preferred Ordinary shares and the Ordinary shares. The Preferred Ordinary are to have their 74 per cent., the Ordinary 8 per cent., after which it is possible to add substantially to reserves, special reserve receiving £5o,00o, against nil, general reserve £5o,000, against nil, and benevolent fund £4,000, against nil, leaving a balance of £45,456 against £44,2oo to go forward. A rapid change in fortune is no new experience for this company, but it looks as though the better times are to continue for the stocks work in progress stood in the balance-sheet at £6o9,459 on July 31st, compared with £470,164 in the previous year.
* * * * UNIT TRusr DEVELOPMENTS Several innovations have recently been made in the unit trust field of investment. The British and American Securities Trust which was formed by Improving Securities Trust was started last July to give the unit trust type of investor an oppor- tunity of holding an interest in American stocks. The Trust's interest in Americans is limited to 50 per cent, of its fund and it gives an estimated gross yield of about 5 per cent. This idea has now been pushed still further by Unit Trust Investments who have formed the Trans-Atlantic Unit Trust. This trust has two series of sub-units, one based on to American common stocks and the other on ro Canadian stocks. At the present bid prices the gross yield on the U.S.A. series is about £5 os. rod. per cent, and on the Canadian £4 16s. I id.
Not less interest will be aroused by the new Investors Income and Reserve Trust" which is being launched by the 15 Moorgate group. The underlying principle here is to build up a reserve for the unit holder which he can with- draw on a rainy day. The trust is of the widely based type composed of 175 different stocks chosen to give a yield of about 5 per cent. But there are two different series of sub- units running against an identical investment portfolio. The investor may elect to draw his full share of the income by buying the Income units, or to receive only three-fifths of the available income say 3 per cent. gross—in cash and to ha vc the other two-fifths—say 2 per cent. gross—paid into a reserve to accumulate at compound interest until needed. He m3v (Continued on page 832.)
FINANCIAL NOTES (Continued from page 830.) withdraw his share of the reserve, switch from one type of unit to dr: other or of course combine the two to give any yield rec,u red between 3 per cent. and 5 per cent.
LONDON MARITIME INVESTMENT COMPANY Sir F. Vernon Thomson's review of the tramp shipping out- look at Tuesday's meeting of the London Maritime Investment company cannot be regarded as cheerful. Although he ex- pected the majority of tramp shipping companies to show satis- factory results for 1938 owing to the relatively favourable conditions of the early months of the year, he indicated that the freight markets are now mostly unremunerative. The outlook for British tramp shipping in the immediate future was, he said, far from encouraging. Fortunately for the London Maritime there is a more Cavourable aspect in the outlook. The recovery in stock market quotations has reduced the deprecia- tion on its investments from 34 per cent. at the date of the balance-sheet to 25 per cent.
DOMINION REEFS PROGRESS Although the output of gold and silver by Dominion Reefs (Klerksdorp) for the nine months ended last June increased by over 60 per cent, it is with the development of additional ore reserves that the company is still chiefly occupied. At the meeting on Monday the chairman Captain A. C. Moreing, showed that important additions had recently been made to the fine grinding and cyaniding plant capacity, bringing it to nearly 2o,000 tons a month, which is the capacity of the coarse crushing section. He hopes through accelerated development work to build up large ore reserves and so to feed an increased tonnage and an improved grade of ore to the reduction plant, with a corresponding increase in profits. J. D. M.
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