BURMAH OIL PROFITS
Some of the optimists seem to have been disappointed by the Burmah Oil results, good as they undoubtedly are. Allowing for last year's so per cent. scrip bonus, the 21 per cent. distribution now proposed is slightly better than the previous 30 per cent. rate, and I cannot see why expecta- tions should have been pitched any higher. The 1938 revenue, it is true, had the benefit of larger receipts from the company's big investments in Anglo-Iranian and Shell, which has raised the proportion of profit derived from investment holdings from under 50 to 62 per cent.; but it should have been apparent that trading income was bound to show a fairly sharp fall. Average selling-prices last year were lower in all markets than in 1937, apart from which the taxation charge must have increased.
At £4,015,246, .against £4,162,285, the decline in profit, after taxation, is very modest indeed and the payment of the 21 per cent. dividend is consistent with the maintenance of the company's traditionally conservative standards. A further L500,000 goes to Fields —Expenditure Equalisation Reserve, £100,000 to General Reserve, £370,559 to depre- ciation, and the carry forward is £65,000 up at £702,154. Since the announcement Burmah Lx ordinary units have fallen 3s. to 8i s., at which the yield is over 5 per cent. I think the prospects are good enough to justify a purchase at this level by any investor willing to take a long view.
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