Company Notes
By LOTHBURY
DURING 1962 The Royal Bank of Scotland increased its issued ordinary capital by two stock issues. The first, in May, was a one-for- four scrip issue; the second, in November, was a one-for-five rights issue at 72s. 6d. per £1 of or- dinary stock. The last issue has increased the bank's ratio of capital and reserves to deposits and now increases the paid-up capital to £11.4 million. The Governor of the bank, the Duke of Buccleuch and Queensberry, advises that the Royal Bank is now increasing its interests in its associated banks. It is taking up two million £1 shares in Williams Deacon's Bank at par and 500,000 £1 shares in Glyn Mills at £2 per share. These two banks recorded slightly lower profits, but have extended their business by opening new branches. The parent bank now has seven offices in London. The Governor ex- presses the hope that the Government will con- tinue to give regional assistance on a more permanent basis, to enable firms to establish their businesses in Scotland. There was little change in the net profit of £1.088 million from the previous year. A dividend of 15.5 per cent. is to be paid on the increased capital, giving the shares at 80s. 6d. a yield of 3,8 per cent.
Last year was an eventful one for the National Provincial Bank. In May there was a rights issue of one for seven £1 shares at £3 per share, which raised £10.29 million. This amount will be used to expand the bank's business and to rebuild its head office. The second event came in October when, to the surprise of the market, an offer was made by the NPB for the capital of the District Bank. The basis was five NPB shares for four District shares, which was ac- cepted. This merger has greatly strengthened the group, which now has 2,160 branches and offices. Another significant feature from the report of the chairman, Mr. D. J. Robarts, is that the hire-purchase subsidiary, North Central Finance, increased its profit from £661,000 to £915,000 during a time when other companies in this field were still licking their wounds from past losses. The chairman points out in his report that it is necessary to promote expansion of products and investment in the future if the economy of this country is to be improved. At 74s. the £1 shares, yielding 3.8 per cent., are below their best.
The fall in the Bank rate is one of the reasons why Bowmakers, the industrial bankers, are back in the dividend list with a 5 per cent. payment for the year to October 31, 1962. Consolidation of the company's organisation, resulting in eco- nomics, also helped to transform the previous year's net loss of £849,000 into a net profit of £254,000. The profit figure would have been higher by £520,000 had it not been for the non- recurring loss by the subsidiary Yeoman Credit. Two-thirds of the company's business is derived from the motor industry. Other interests include the financing of agricultural equipment, also the purchase of securities and the payment of educational fees. The chairman, Lieut.-General Sir John Cowley, says that the company is now running on sound lines. No doubt the current year's results will show further improvement, but even if the dividend is doubled the 5s. shares, now 14s. 1-1-d., will only yield 3.5 per cent. The present yield is 1.8 per cent, Encouraging results come from City and Country Properties with a 26 per cent. increase in the pre-tax profits of £170,000. The company has at last been able to obtain LCC consent to its plans to go ahead with the development of the Petticoat Lane site. This will include a super- market, office block, car park and warehouse. without doing away with the well-known Middle- sex Street market. This, in time, will make a valuable contribution to profits. The maintained dividend of 20 per cent. may be disappointing, but the cover has improved to 1.5 times. Mr. John Tilling, the chairman, no doubt wishes to conserve the Company's resources for the future- An above-average yield of 6.4 per cent. for this class of property can be had on the 2s. shares at 6s. 3s.
Grovewood Securities has various interests, in- cluding chemicals, hotels and Brands Hatch, but the majority of its income is derived from properties. These interests were increased last year by the acquisition of Ewbanke Trust. The property portfolio has expanded from £1.3 mil- lion to £3 million, two-thirds of which is in residential property, with the balance in com- mercial and industrial property, mostly In London. These interests are likely to be ex- tended now that the Eagle Star Insurance has agreed to advance as a mortgage loan £1.5 million over the next three years, and has also purchased a million shares from the chairman, Mr. J. P. C. Danny. The current year will in- clude a full year's profit from Ewbanke Trust and therefore should exceed the pre-tax profits of £166,000 for 1961-62. The Is. shares at 4.s. 4-}cl. give a reasonable yield of 3.4 per cent.
At the time of the one-for-five rights issue made last July, the directors of L. Ryan Holdings forecast substantially higher profits for the year I to November 30, 1962. The company's business is that of coal salvagers and plant hirers. It has done well to produce pre-tax profits of £254,000 against £208,000 and is paying a final dividend of 35 per cent., making a total of 55 per cent. 'against 40 per cent. It is also proposed to make a bonus issue of one for ten, which it is hoped will become an annual feature. The 2s. shares are to be split into two shares of la. each. It looks as if the same rate of dividend will be paid next year on the increased capital, in which case the 2s. shares at 18s. 9d. give an attractive yield of 6.4 per cent.
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