Company Notes
By LOTHBURY
RE-TAX profits of Dunlop Rubber well ex- r ceeded the forecast, made last October, for the second half of 1963. In fact, the overall in- crease is as much as 14.4 per cent at £15.75 million. This is really. .a good break-through from the somewhat dull years previously. Shareholders are rewarded with a final dividend of Is. 3d. (12.5 per cent), making a total of Is. 10d, (against Is. 7d.) or 18.3 per cent. A one-for- three scrip issue is also proposed. The booming car industry will, of course, continue to help Dunlops, but it should be remembered that more than half the company's turnover comes from overseas sales and one-third of total sales are from products other than tyres. On the larger capital the strictly scaled-down dividend would be Is. 4Id. on the 10s. shares, which, now at 39s., yield 4.7 per cent, but I would expect a higher payment with the buoyant trading con- ditions that now exist.
The chairman of the Ross Group is optimistic for the future, as he states that for the first quarter of this year every sphere of the com- pany's operations has shown an increased profit. which suggests that the increase in the pre-tax profits for 1963 of £679,000 will be bettered. With a better outlook for the company's trawler in- terests and expanding frozen-food business, the 5s. shares are reasonably priced at 18s., to yield 6 per cent on the dividend of 22 per cent.
The unchanged dividend of 5s. 9d. tax-free from the Pearl Assurance for 1963 is really better than this, as in 1962 an extra 6d. in the interim dividend was paid which had been omitted from the previous year. This great company has once again expanded its revenue and, as usual, its whole-life and annuities business. It would be hard to find a better investment in the insurance group than the 5s. shares, which at £10 10s. yield 41 per cent.
A turn-round of over £4 million in the for- tunes of Pressed Steel is far better than expected and so also, following the interim of only 2.5 per cent last November, is the final dividend of 17.5 per cent, making a total of 20 per cent 'for 1963. The net profit (after a nil tax charge) is £1.43 million against a previous loss of £3.562 million. The directors state that overall production of motor bodies for the first three months of the current year is well ahead of the same period of the previous year; this trend is likely to continue. Now that the loss-making domestic appliances factory at Swansea is being closed down and a smaller amount is being spent on the development of the Ieagle 2,06 aircraft, the outlook is certainly better. But the company is still faced with the repayment of the Board of Trade loan of £9.5 million and the reduction of very heavy bank overdrafts. The 5s. shares have risen by is. 6d. to 18s. 11(1., yielding 5,6 per cent. I consider them high enough at this level.
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