Investment Notes
By CUSTOS
TrTIO most people's surprise, the new £40 million LCC loan did not stay long at a discount. It closed its first day at a small premium and has moved this week to + premium. Issued at 951, this 6 per cent. loan, dated 1972, to yield 6+ per cent., has undoubted attractions for institutional investors. Although it is only 10 per cent. paid up to July 10, the weight of new issues is likely to hold back any recovery in markets generally. In fact, the only market outside the gilt-edged which is showing any re- covery is that in South African gold shares, with a rise of over 25 per cent. since April 25.
Newspaper Shares
Mr. Cecil King, chairman of SUNDAY PIC- TORIAL, said that profits in the current year were not likely to repeat last year's record. The DAILY MIRROR is, however, looking for some im- provement, for its last half-year was affected by the writing-off of losses incurred in the merger of the women's magazines. Nevertheless, I still regard this share, yielding 6.2 per cent. at 11 s. 9d., as the more speculative, and investment-wise I prefer Sunday Pictorial at 14s. 9d. to yield 6,6 per cent. This group is at the moment beaten in the profits race by ASSOCIATED NEWSPAPERS. For the year to March last this company's profits before tax rose by 40 per cent, and its equity earnings by 44 per cent. Its dividend has been raised by 2+ per cent. to 30 per cent. (covered 2.6 times) and a one-for-two scrip bonus declared. These lusty results are due partly to the increase in circulation of the Mail and the Evening News following on the News Chronicle-Star take-over, the higher selling prices and advertising rates and the sale of the Dispatch, which had been losing £600,000 a year. Only the Sketch remains as a bad account. The sale of its 51 per cent. interest in Anglo-Newfoundland to Price Brothers in exchange for shares has produced a handsome capital profit. A property development company has now been formed in conjunction with Great Portland Estates to develop, inter alia, the News Chronicle properties in Bouvcrie Street and on the South Bank. Another sub- sidiary - Northcliffe Developments-will develop and diversify the company's non-newspaper in- terests. 1 have previously recommended Asso- ciated Newspapers. 1 still regard them as a good purchase at 31s. 3d. to yield 4.9 per cent.
Steel Shares
The half-year's report of COL‘'ILLES revealed profits down by nearly a half, with output down by under 30 per cent. This is bad enough, but the directors are particularly depressing about the outlook, with a 'marked recession in trade,' dearer coal and an insufficient rise in prices. The interim dividend is cut from 6 per cent. to 5 per cent. and the market no longer expects the maintenance of the 16 per cent. forecast at the time of the unfortunate 'rights' issue last July. I wonder whether it is not too late to switch into a steel share with better prospects and under- lying strength. JOHN SUMMERS, a large producer of sheet, turned in a good half-yearly report, with trading profits almost maintained. For the full year there could be a slight rise. STEEL OF WALES was affected by the bricklayers' strike in the last half-year-its profits showing a fall of 40 per cent.-but it is now operating at a high rate of capacity. In May it set up an output record, as did John Summers. Steel of Wales has cut its interim, but hopes to maintain 10 per cent. for the year. At 24s. the yield would be 8.3 per cent. At 44s. 6d. John Summers yields 6.7 per cent.
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