AN INDUSTRIAL ISSUE
While nobody disputes the Government's prior claims on the new capital market for the purposes of its huge borrowing programme, it is good to see an aperture still available for industrial financing. S. E. Offerman, Limited, which has large contracts in hand for under-carriages and aircraft com- ponents of all kinds, has been granted permission to issue 600,000 new ordinary 2S. shares to its own shareholders. The amount of money to be raised is small, but the prin- ciple involved is important. Apparently, the Capital Issues Committee are willing to allow industrial companies engaged on essential war work to raise capital by the method of share issues, although it is too soon yet to assume that such issues may be made to the general investing public as distinct from the companies' own shareholders. Another interesting point about this issue is that it is being sponsored by the White- head Industrial Trust, the issuing house responsible for the original flotation. The company thus makes use of the specialised facilities which are still available in the City for the financing of industrial expansion.
At the offer price of 25. II& Offerman 2S. shares look decidedly attractive as a speculative holding. For the year ended July 31st net profit rose sharply from £14,630 to £26,113, an increase of over 70 per cent., with the result that the dividend, payable on a substantially larger capital, has been increased from per cent. to zo per cent. There seems to be no reason why at least 20 per cent. should not be forthcoming on the capital after the new shares have been issued, as the company's business is still expanding. Orders in hand, it is now disclosed, are more than three times as great as those of a year ago, and a new factory site has been purchased to enable output to be increased. On a zo per cent. dividend the 2s. shares will yield about 19 per cent. at the offer price of 25. I Id., which is a very generous return after allowing for all the risks of this type of business. The offer should meet with a ready subscription.
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