Company Notes
By LOTHBURY
SIR MAURICE BRIDGEMAN, chairman of British Petroleum, states that the company is vitally affected by the budget, as nearly 100 per cent of group producing activities are located over- seas and nearly 90 per cent of sales are made outside the UK. As the tax laws stand at present, income tax on the present net dividend of £32 milllion, if maintained, would, cost the company an additional £224 million. To add to these difficulties, BP is now faced with a price war in Europe and has already cut its selling prices in the UK. Capital expenditure allowed for is also up. Pre-tax profits for 1964 increased from £191.1 million to £209.9 million and the dividend from 9.4 per cent to 10 per cent, plus 1.67 per cent tax-free from capital reserves. The £1 shares at 47s. are now yielding 8.4 per cent. Lord Thomson of Fleet, chairman of the Thomson Organisation, wrote his confident statement to shareholders before the budget. Even so, in spite of the corporation tax, the out- look appears promising. Pre-tax profits jumped from £4,826,728 to £6,022,545, and the dividend was increased from 24 per cent to 28 per cent on capital increased by a rights issue. The Sunday Times is going ahead, regional news- papers are doing well, as is also the magazine- and book-publishing division. Only about one- sixth of total profits will come from television this year. Expansion. the keynote of the chair- man's report, should bring higher profits. At 20s 3d. the 5s. shares, yielding 6.9 per cent, should continue to prove a rewarding share to hold.
In 1964, the Alliance Building Society con- tinued its record growth under its progressive chairman, Mr. Lewis Cohen. Over the past twenty-one years the number of members and depositors has increased from 22,027 to 168,896 and total assets from £5,820,300 to £139,915,933. The chairman points out that the demand for mortgage loans greatly exceeds the supply and that this situation will continue until the flow of cash from investors and savers increases. The society is now paying 31 per cent to share in- vestors, tax paid, equal to £6 7s. 8d. per cent to a standard rate taxpayer.
A sharp rise in profits is shown by Winn In- dustries, the industrial holding company cover- ing building trades, engineering, vending machines, printing, etc. Pre-tax profits for 1964 were £664,850 against £516,244. A final dividend of 12 per cent makes a total of 20 per cent (2 per cent more than forecast) on the capital increased by a one-for-two scrip issue. The chairman, Mr. J. C. Pidduck, states that the company has a strong order book and that the first quarter of the current year shows a substantial increase in turnover. The 4s, shares at 1 Is. give a useful yield of 7.2 per cent.
The second six months, to January 2, 1965, of Guest Keen and Nettlefolds were highly satis- factory and better than the interim report indi- cated. A final dividend of 9 per cent makes a total of 14 per cent on the capital increased by a 50 per cent scrip issue. The payment is covered 2.3 times by earnings. The preliminary figur'es show that pre-tax profits jumped by as much as 40 per cent to £31.1 million.. It is believed that the steel side of the business contributed about 25 per cent of this profit. Whether or not the company's steel interests are nationalised, the £1 shares at 50s. 6d., yielding 5.6 per cent, look to be a fair investment.
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