Company Notes
By LoTIIBURY THE setback in profits from the Ross Group for the year to September 30, 1962, was ex- Pected. Pre-tax profits dropped from £1.66 Mahon to £679,000, but the dividend of 22 per cent, just covered by earnings, is maintained. Heavy losses occurred in the middle-water fish- ing section. Previous losses in the chicken sec- !ton have, by integration, been eliminated, while heavy initial costs in the frozen food division have now been absorbed. The chairman, Mr. Carl Ross, is sufficiently confident for the future to maintain the dividend; in fact, he states
that it would have been grossly misleading and damaging to shareholders' long-term interests to have reduced the rate. Turnover in every depart- ment was higher than last year. Frozen foods now account for 35 per cent of turnover, chickens 20 per cent, fishing 8 per cent and fish merchanting and transport 12 per cent. No doubt the group is now over the worst of its troubles, but with an overdraft of £4.62 million there is little chance of an increase in the dividend for the current year. The 5s. shares at 19s. are fairly valued to yield 5.7 per cent.
Permanite, producing specialised roofing felts, flexible bitumen, damp-proof courses and simi- lar products, did very well in 1962 to increase its pre-tax profits to £383,000 from £291,000, but the chairman, Mr. J. F. Stuart, warns share- holders that the severe winter has affected the first three months' trading of the current year. It remains to be seen if this setback will be made good during the remainder of the year. But it does suggest that it is unlikely that after the three-for-ten scrip issue now proposed the dividend will be increased on the enlarged capi- tal. Last year's dividend of 23 per cent (in- creased from 18 per cent) was twice covered by earnings. On this basis the 5s. shares at 23s. 9d, yielding 4.8 per cent, are fairly valued.
The Pearl Assurance announces a final divi- dend of 4s. 3d., tax-free, for 1962, making a total payment of 5s. 9d., tax-free, for the year. But this includes 6d. per share which was retained in 1961 under dividend restraint, so that the effective rate is 5s. 3d. Reversionary bonuses in the ordinary and industrial branches have (generally) been increased. The 5s. shares at £111
give a very satisfactory yield of 3.8 per cent. The shares are well worth holding for further appreciation.
Last year Typhoo Tea paid an interim divi- dend for the first time; this was 10 per cent, together with a one-for-five scrip issue. This is now followed by a final payment of 30 per cent, making the equivalent of 38.3 per cent, compared with an effective previous rate of 35 per cent. This is excellent news, and the in- creased payment is justified by the higher pre- tax profits, which rose by 7 per cent. Net profits were up from £1.33 million to £1.42 million. The chairman, Mr. J. R. H. Sumner, tells share- holders that exports are still expanding and that the company's tea-caddy offer to newly-married couples has done much to create good will- the company's teas are very popular. The next dividend could easily be rounded off to 40 per cent or even increased. The 5s. shires, now 45s. 6d., yielding 4.2 per cent, have proved to be an excellent investment.
Mr. Julian Hodge, of Cardiff, has this week floated the Hodge Group, an investment holding company, whose subsidiaries include Gwent and West of England Enterprises, Anglo Auto Finance and Welsh Dragon Securities. The last- mentioned will on April 22 make an initial block offer of five million 5s. units in the Welsh Dragon Trust. The Is. Ordinary shares are being placed in Cardiff at 10s. each and, allowing for the fact that Mr. Hodge will not take any dividend in this and the next financial year on his holding of 9,878,750 Ordinary shares, the prospective 40 per cent. dividend will be covered 1.6 times by estimated earnings.
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