Venturers' Corner One of the groups of British companies which
has staged a remarkable recovery in recent years is that engaged in manufacturing coke and benzol and similar products. It is not merely that coke prices, which are the principal source of gross earnings, rose to a remunerative level in 1937; many of these undertakings have modernised their plant and effected really substantial reductions in their costs of pro- duction. A case in point is Benzol and By-Products, Limited, which, after a long record of ill-success, has lately had the benefit of new management. Thus, for the year ended September 3oth, 1937, trading profit rose from £27,930 to £55,302 and net profit, after tax, from £4,902 to £24,614. This improvement was continued in the following year to September 3oth, 1938, when the net profit was nearly doubled at £47,144. Assets were revalued and the debit balance on profit and loss account was eliminated.
The interesting point is that the net profit of £47,144 is equivalent to over three years' Preference dividend, so that assuming the level of earnings is being maintained, the com- pany should be able this year to begin paying off the large accumulated preference arrears. These date back to Septem- ber 3oth, 1926, equivalent to about xis. 6d. net per Lx prefer- ence share. The preference shares of 6 per cent. cumulative participating LI shares and are quoted around I7s. 9d. in the market. If the arrears are gradually paid off in cash, a buyer would be giving only 6s. 3d. for the Li shares ex the arrears of dividend. I understand that although coke prices have fallen well below their peak of eighteen months ago, the position of the company is still quite promising, especially now that the recovery in iron and steel activity is stimulating demand.
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