TRANSPORT BOARD DEVELOPMENTS
At last the London fare increases are officially outlined and they follow very closely the forecasts made in these notes in recent weeks. It is clear that the railways, main line and Board's, are to play the major part in increasing receipts, and it is also clear that one must not look for any benefit from the proposed increases during the Board's current financial year which ends on June 3oth. My own guess would be that the dividend on Transport " C " stock for the current year will not differ materially from last year's 4 per cent. But what benefit may be expected in a normal full year ? One can only make estimates since it is not pos- sible to assume that increased charges will bring in a pro- portionately higher gross revenue. Assuming, however, that the effective increase in receipts is about 31 per cent., which should err on the side of conservatism, it seems that Trans- port " C " should have a sporting chance of getting its standard rate of 51 per cent.
Now the last accounts showed that the Board's revenue was swollen by a sum of £230,000 refunded from Income Tax not required. If we allow for this non-recurring item, the gap between net revenue and the amount required to cover a 51 per cent. " C " dividend was roughly L600,000. If we relate this amount to the total of the receipts of the " Pool " in which the Board shares with the main-line rail- ways, we see that it represents only about II per cent. Last year the Board actually received over 70 per cent. of the pooled receipts, but its nominal share is 62.1 per cent. It is apparent, therefore, that taking lower proportion, an increase of about £1,000,000 in the pooled receipts, or about 21 per cent., is all that is required to cover the C " divi- dend, other things, of course, remaining equal. At 74 the stock should be well worth holding.
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