Company Notes
By LOTHBURY
'Sirthe 'tone of Hawker Siddeley's chairman, 'Sir Roy Dobson, in his report to shareholders. He says: `The present year shows signs of being better than 1963-turnover will remain at a high level-activity in the industrial section is rising and we are hopeful that the improvement in Canada will continue.' Pre-tax profits for 1963 increased to £12.3 million from £10.8 mil- lion and the net profit from £5.2 million to £6.2 million. The 1 per cent increase in the divi- dend to 12 per cent, from earnings of 25.7 per cent, has some significance. July 31 this year is the last date for changing from the 51 per cent convertible debenture now £115 (there is still £12 million outstanding) into the ordinary shares. Assuming all this stock is converted, the equity capital will be increased from £39 million to £47.68 million and, after allowing for the con- sequent interest savings, earnings would fall by 5.2 points. But I would suggest that the dividend could very well be maintained and, if so, deben- ture holders should certainly convert. They can- not come to any harm with a £1 share yielding 7 per cent at 34s. 6d. They look undervalued at this price.
Another optimistic statement comes from Mr. H. Scott Thompson, chairman of Mount Charlotte Investments, the hotel and catering group. In his statement with the 1963 accounts he says: `I am sure that subject to unforeseen circumstances the prospects for 1964 are very good.' Last year the net profit increased from £113,000 to £124,000 and the dividend is main- tained at 13.5 per cent on the capital which was increased last January by a rights issue. Since the acquisition of Nuthalls, the company has been consolidating its interests and has continued to improve its Bettafoods and Bettabars. Now the chairman states that further acquisitions are being made in hotels and general catering businesses. As the company continues to grow I hope to see the dividend cover increase. The 2s. ordinary shares at 5s. yielding 5.5 per cent are a promising investment. This year the annual general meeting is being held on June 27 at the Grand Hotel, Bristol, which has recently been substantially rebuilt.
Higher group sales from Bovril in 1963 were offset by higher costs and tax charges. The trading profit was only £23,000 lower; the net profit, however, jumped from £473,000 to £606,000, which was entirely due to a profit of £53,000 on the appreciation of the Argentine peso against a previous loss of £290,000. The dividend is again 12 per cent. The Argentine beef, shortage, due to over-slaughtering in 1962 and 1963, confronts the company with a prob- lem, states Lord Luke, the chairman, as the company interests there are not likely to make a profitable contribution for two or three years. Other interests include the manufacture of meat products, including Marmite and other foods such as Ambrosia, etc. The £1 shares at 36s. 9d. yielding 6.4 per cent should continue to prove a good income stock.
Previous page
