LANCASHIRE COTTON POSITION Holders of Lancashire Cotton Corporation shares, who
may be scratching their heads at the slump in the price of raw cotton, need not alarm themselves. The news from Manchester, so far from being depressing, is full of encouragement. The Corporation, as I have previously emphasised, is concerned primarily with the maintenance of satisfactory profit-margins in the medium-counts section of the spinning trade. I under- stand that margins have improved, which may mean a great deal to the Corporation, with its huge output. Again, the order-book is healthy until at least the end of the year. Estimates in Manchester are that this year's profits may work out at some- thing over £400,000, by no means an impossible figure under present conditions.
If this forecast were realised, the board would be able to meet the full 5 per cent. dividend on the non-cumulative preferences, as well as make a generous allocation to deprecia- don reserve, but the rate of dividend paid is not really important. The interesting feature of Lancashire Cotton Corporation preferences is their right of conversion into ordinaries, until 1951, on a par for par basis. At the moment, with the ordinaries quoted at 15s. 6d., the right is valueless, but it may easily acquire a considerable value in the course of the next two years, A combined purchase of the preferences and the ordinaries at current prices should turn out a worth-while textile investment,
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