Company Notes
By LOTHBURY
TitE reason for the high yield of 7.2 per cent on Pye (Cambridge) 5s. shares at 13s. 6d. on the 20 per cent dividend is due to several factors: (I) with a 40 per cent corporation tax, retentions will virtually disappear; (2) 43 per cent of profits come from domestic appliances which are under pressure because of the credit squeeze; (3) the net bank overdraft for the year ended March 31, 1965, was £8+ million. The pre-tax profits were £5,021 million against £4,640 million. The company has a considerable potential for the future, but at the present time does not appear to be an attractive purchase.
A confident statement comes from Mr. Leslie Marler, chairman of Capital and Counties Property, to the effect that shareholders need not fear any reduction in their dividend for the next two or three years, subject to no increase in the corporation tax. After that time the rental income should continue to show a ,progressive increase. Pre-tax profits rose by 21 per cent and by the end of the year rental income will exceed £3 million. The chairman is confident that future rental values are substantially in ex- cess of those at present. The company's strength is in its present assets plus its ownership of the very valuable freehold site at Knightsbridge now under discussion for development with the GLC. The company has an agreement with the Prudential and Norwich Union up to £18.3 mil- lion for finance for future development. The 5s. shares at 7s. 3d., yielding 4.8 per cent, are essen- tially a long-term and promising growth stock. • Peter Brotherhood, manufacturers of high- pressure compressors for many types of machinery, issues an encouraging report for thz year ended March 31, 1965. In March the com- pany paid a larger interim dividend on the creased capital. This is fanned by a final divi- dend of 20 per cent. The balance sheet discloses a surplus (on the revaluation of assets) of £889,471, which is carried to the capital reserve account. The net profit after tax amounted I° £462,762 against £358,073. The chairman, Mr. William Thompson, after fifty-one years' service with the company, hands over at the end of this year to Mr. G. W. Wilks, but he remains on the board. The 10s. shares at 48s. yielding over 5 per cent are a good long-term investment.
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