COMPANY NOTES
MASSON SCOTT, the paper mill engineers, have produced good results for the year ending March 31, 1958. Trading profits are up from £198,110 to £268,809 and, after deduction of tax, the net profit was £119,281 as against £98,085. Thus the amount earned on the ordinary capital (as, increased by a 20 per cent. scrip issue) was as much at 69 per cent., out of which a dividend of 17+ per cent. is declared (including a bonus of 5 per cent. as against 2+ per cent. for 1957). Share- holders should be well pleased with these results, for although this time last year. the Chairman was not too sure if the rising profit trend would continue, it would seem that, taking a long-term view, the paper machinery making industry will not suffer the temporary recession now being experienced by paper and millboard manufac- turers. This company's progressive record and strong dividend cover make the 4s. ordinary shares at 7s. 9d. look attractive to yield 9 per cent.
An excellent report comes from International Tea for the year ending April this year. Trading profits are over 13 per cent. higher at £2,450,000 and the dividend is increased from 17+ per cent. to 19 per cent., which is still covered about twice, by equity earnings. Having regard to the keenly com- petitive conditions in the grocery trade, these results are impressive and testify to excellent management. The directors have been pursuing an intelligent policy of financing the modernisation of their stores and the creation of self-service counters from the proceeds of property sales. Last year the company entered into contract with the Legal and General under which the insurance company buys the properties and then leases them back to the stores. The surpluses from such sales are carried to capital reserve and the sales of the remaining properties under the contract will re- sult in a surplus of around £1,200,000. The com- pany is capitalising £3,100,000 of the capital reserves and issuing a bonus of one for one for ordinary shares. The market was naturally de- lighted with these results and the 5s. shares rose s. 3d. to 18s. 6d. to return a yield of 5.3 per cent. They are an excellent equity investment in the consumer trades.
Ward and Goldstone, manufacturers of in- sulated electrical cables, wires and plastic products, have an enviable profit record. The Chairman, Mr. Sampson Goldstone, states that by the employment of much enlarged manufacturing facilities the company has achieved a record volume of output far in excess of any past performance. The balance sheet figures do not altogether reflect this success- ful year's trading, for allowances must be made for falling commodity prices, keener competition and rising costs. However, the net profit figure at £442,734 is extremely satisfactory and provides a fourfold cover for the dividend of 25 per cent. Last year there was a 100 per cent. scrip issue, and
ploughed-back profits have considerably increased reserves, the liquid position being very strong. This Company is well placed to benefit in .any improve-.. ment in world trade. The strength of management and of the balance sheet justifies a price of 26s. 6d. for the 5s. ordinary shares to yield £4 14s. 6d. per Cent.
Kitchen and Wade, the well-known manufac- turers of drilling and boring machines, report a slight decline in profits for the year ending March 31, 1958, but the Chairman, Mr. Albert Kitchen, reports that the company's order book, in spite of difficult export markets, is better than it was at the end of the financial year. He also, states that taxation absorbed as much as 52 per cent, of the company's profits. The net profit was £85,128, for which a total dividend of 10d. (equivalent to 1011 per cent.) per,.fls. ordinary share is recom- mended. It is also proposed to capitalise £165,000 of the general reserve fund of £380,000 by issuing one 4s. ordinary share for every two shares held. Recent acquisitions of subsidiary interests and the extension of existing factories should enhance the earning capacity of the company, so that the 4s. ordinary shares at 10s. yielding 8 per cent. are reasonably priced.
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