Venturers' Corner High yields are not hard to find among
the shares of the small and speculative type of industrial company, especially when there is no long financial record to go on, but I feel that in many instances present prices do less than justice to the position and prospects. Thorn Electrical Industries seems to be a case in point. Here is a go-ahead company engaged in the manufacture of electric lamps, radio and tele- vision sets. In the past three years; in face of keen compe- tition, net profits, before taxation, have risen from £39,490 to £47,558, the dividend on the ordinary 5s. shares has been maintained at 20 per cent., and over L40,000 has been appropriated for reserves. Thus, out of the net profit, after preference dividend, of £32,883, for the year ended March 31st, 1939, the board put £15,000 to reserve, the 20 per cent. dividend representing less than one-half of the available earnings.
I like this company's balance-sheet, which shows cash at L120,115 out of total assets of less than £300,000. Obviously there are ample resources for financing expansion, and the board's intentions were clearly set out at the annual meeting on August 1st. It was then intimated that plans are in hand which will reduce production costs and help sales and that a range of television receivers was to be added to the radio programme. The field in which the company is engaged is keenly competitive, but it seems to me that on its past record Thorn Electrical is entitled to a better rating for its shares than the present price of 9s. 6d. At this level the 5s. ordinaries have speculative attractions, yielding II per cent. on the 20 per cent. dividend and 24 per cent. on
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