PEASE AND PARTNERS PROFITS
It is unusual in these days to find a board of directors declaring an increased dividend out of a reduced profit, but this is what has happened in the case of Pease & Partners, the Middlesbrough coal and iron masters. Smaller sales of pig-iron and coke were reflected in a fall in profits for the year ended March 31st, 1939, from £514,655 to £469,331, but even the lower figure is sufficient to allow the board to pay 121 per cent. on the ordinary shares, against to per cent., and make very substantial allocations to reserves. As much as £195,000 goes to depreciation, renewals, reserves, &c., and £23,000 is added to the carry forward, at £263,220. The strength of the position is under- lined in the consolidated balance-sheet, which shows total liquid assets, including £878,000 in cash and investments, of £2,193,510 and total reserves of £936,960.
Against this background and in view of the company's promising prospects for the current year noz even the most strait-laced will quarrel with the board's dividend decision. The market's approval has been signalled by a rise in the os. ordinaries from los. 9d. to I2S. 9d., and in the options from is. 6d. to 2S. Allowing for the dividend included in the price the ordinaries still yield over to per cent., which seems to me a very generous return for a share of this kind. At 25. the options are an interesting speculation on market possibilities between now and the end of the year, the ho'..cler having the right to subscribe at los. for ordinary shares up to December 31st. In relation- to the current price of the ordinaries and their prospects the 25. asked for the option is little enough.
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