TRANSPORT " C " PROSPECT
Amid the excitement of the Government's deal with the main-line railways the less fortunate position of the London Transport Board has been overlooked. Unlike the main- line railways the Transport Board has been badly hit by war. Accordingly, it has been compelled to accept less generous terms under the pooling scheme. The guaranteed minimum on the " C stock is II per cent. and at " Stage 2 " the earnings rise to just over 3 per cent. On this basis the official minimum price of 65, at which Transport " C " has been solidly frozen since the outbreak of war, looks much too high but holders should not be panicked into hasty sales when free dealings are resumed. After all, this stock differs from home rail securities in one important respect—that its post-war prospects are better than its war-time status. I see that the directors have declared an interim of I1 per cent. for the year ending June 3oth, 1940, which suggests that they take a hopeful view of the pooled revenue. If, as seems a reasonable deduction, the total distribution is brought up to 3 or 34 per cent. Transport " C" is worth fully 6o today. At that price it would yield 24 per cent. on the guaranteed minimum and 5 per cent. to over on the likely dividend for the war period with the probability that the dividend will be something higher than 3 or 31 per cent. when the war is over. The price should gradually improve.
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