PLATT BROTHERS AGAIN
Having taken a firm line against the original reconstruction proposals put forward by Plan Brothers (Holdings), the textile machinery makers, I cannot resist the temptation to relate the board's scheme to the results now disclosed. In the light of the latest figures, which show that net profits rose from £54313 to £80,685, it is difficult to see why heavy sacrifices should have been asked of the second preference holders. The board has declared a 5 per cent. ordinary dividend, admit- tedly on a much-reduced amount of capital. As things have turned out, therefore, holders of the second preferences have not come out badly. They get 7 per cent. on their LI of pre- ference, out of which only 5 per cent. is now cumulative, plus just over per cent. in respect of their allocation pf ordinaries.
The second preference shares themselves, quoted at 15s. 6d., seem to me to be rather undervalued on a yield basis of 9 per cent. The current year has opened well for textile machinery in the export markets ; both quantities and values show an increase of roughly 4o per cent. for the first four months. I suspect, however, that these deliveries are a belated reflection of the relatively prosperous condition of the textile industry overseas about the middle of last year. One must be prepared to see a reversal of this upward trend in exports in the second half of 1938 when the recent stagnation of the textile trade begins to tell its tale of fewer orders for equipment. That is why I regard Platt Brothers 6s. 8d. ordinaries as fully valued for the present at 3s. 9d. It will be time enough to consider them whenever the cotton trade begins to show fresh signs of life. * * * *
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