STEEL AND COAL Among the many operations which should enliven
the industrial market in the autumn is the introduction to the Stock Exchange of the ordinary £i shares of the Laitcashiie Steel Corporation. With the financial backing of the Securities Management Trust, the rationalising offshoot of the Bank of England, the Corporation has carried through a thoroughgoing programme of plant. improvement and is now earning sub- stantial profits. Last year's' earnings on the ordinary capital, after making generous allowances for depredation and contingencies, ' reached 8 per cent., and a 5 per cent. dividend was paid, Assuming that only a moderate increase has been taking plaCe in 1937, I think the shares could be conservatively valued at
par.
On this basis the ‘x ordinaries of the Wigan Coal and Iron Company, which holds 200,863 54 per cent. preference and 744y23,5 f` A!' ordinaries in the- Lancashire-Steel Coiporation, look an attractive investment at 15s. These holdings alone are clearly worth about £4,000,oao, against. a total issued capital, all in ordinary shares, of £1,809,725, valued at today's price of 15s. at kr,400,000. The balaice of £400,00o thus represents the market valuation of the company's other holdings which comprise 213,700 7* per cent non-cumulative Li prefer- encei and 623,114 B " Li ordinaries in the Wigan Coal and Iron Corporation. So far, the Corporation has not paid any dividends to the Wigan Coal and Iron Company, but profits have now risen to a level when 'payments should be possible not only on the preferences but on the ordinary capital. Last year, the dividends received from the Lancashire Steel holdings enabled the Wigan Coal and Iron Company to pay a dividend of 2 per cent. With the Wigan Coal and Iron Corporation holdings now approaching the dividend-paying stage,' the revenue should soon be sufficient to cover a dividend Of at least 4 per cent:, giving a yield of 54- per cent. to a buyer at today's price. •
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