Venturers' Corner There has been a significant rise in recent
weeks in the 5s. ordinary shares of Richardsons Westgarth and Co., the Tyneside firm of marine engineers. Early this year the quotation was down to is. 6d., but it has now recovered, as a result of steady buying, to 3s. 9d. I am prepared to believe that the next accounts, colvering the year to March 31st, 1939, will reveal profits sufficient to allow a resumption of ordinary dividends. Further, I should expect that, in common with other undertakings of its kind, this company has latterly felt the benefit of revived shipbuilding activity. The prospects for the current year should therefore be quite promising, especially in relation to the existing capital. LaA year the company absorbed two other marine-engineering firms and put through a drastic reconstruction scheme.
After their recent rise the ordinary shares, although still under par, seem to me to be a less attractive purchase than the 5f per cent. Convertible Debentures, standing around 92. The yield is practically 6 per cent. at this price, and the interest should be well covered by current earnings. Ther is the added speculative attraction, however, that holder, of these debentures have the option, exercisable at any time until March 31st, 5943, of exchanging into ordinary shares on the basis of four ordinary 5s. shares for each LI of debenture stock. So long as the ordinaries remain under par r112 option is, of course, of no practical value, but in an industry such as marine-engineering, which is subject to considerable fluctuations, a four-year option of this kind may easily become valuable. There seems to me to be at least art even (Continued on page 884) FINANCIAL NOTES
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chance that the ordinaries will move over par before March 31st, 1943, in which event the debentures would rise to over too on the strength of their conversion rights. CUSTOS.
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