GOOD INDUSTRIAL RESULTS
In these days industrial company earnings need to be good if investors are to be spared the Chancellor's swingeing increase in taxation. In one or two cases profits are shown to have risen sufficiently to cover heavier tax provision and a higher dividend, but those are exceptional. In most instances investors have been well satisfied if profits have allowed the pre-war rate of dividend to be maintained. This week has provided several cases of really good industrial earnings. Tube Investments, for example, show dividends received for the year ended October 31st at £840,860, after (Continued on page 798)
FINANCE AND INVESTMENT
(Continued from page 796)
taxation, against £835,359, which suggests that the trading results of the group went ahead sharply. In the consolidated balance-sheet taxation reserves are up from L1,o8o,00o to £1,875,000, depreciation and contingencies from £1,000,000 to L1,300,000, and the surplus from £1,368,804 to £1,436,336. Cash has risen from £1,660,144 to £2,350,768, so that the group is well supplied with finance for expansion. On the basis of the 231 per cent. dividend, which is amply covered, Tube Investments £1 ordinaries yield about 54 per cent. at today's price of 85s. They seem to me to be a worth- while holding for peace or war.
Another industrial company which has done well is Crompton Parkinson, the electrical equipment makers. Profits for the year ended September 3oth, struck after allow- ing for taxation, have risen slightly from £402,046 to £4o4,9o3, while those of the British Electric Transformer subsidiary, taken on the same basis, are up from £79,681 to £79,736. These figures, read in conjunction with the recent passing of the Johnson and Phillips interim, suggest that the electrical engineering industry weathered successfully the pre-war political storm and is facing conditions of actual war with confidence. As expected, Crompton Parkinson is pay- ing a 15 per cent. cash dividend, which is supplemented by a 5 per cent. cash bonus, making a total of zo per cent. The 5s. ordinaries are quoted at 18s. 3d. to yield 51 per cent. They are quite a reasonable industrial holding
Previous page
