Venturers' Corner There should be a chance for the speculative
buyer in the £t preference shares of W: H:-Doiman and Co., the Stafford-' shire makers of Diesel engines and general engineers, at qie current low price of 5s. 9d. These shares carry -a non=cumu- lative 54 per cent. dividend, but although profits have occa- sionally reached '.a figure which would cover a dividend, nothing has been paid for over ten years. On the other hand, the company is faced with a secured loan of £34,640, outstanding notes of £76,000, and £84,976 of to per cent. Second Debenture stock. ObvinuSly; the burden -offried charkee is Unduly heavy and before the position Of the preference holders can be substantially improved, something will have to be done to strengthen the liquid resources and to replace the to per cent.. Debentures by a lower-cost issue. .
So far, the company's earnings have not-justified this much- needed financial operation but the latest figures, covering' the year ended March 31st, 1937, raise new hopes. The net profit, after meeting all fixed charges, has risen from £1,636 to £19,654 and the board states that the order book is larger than at this time last year. The time' should' surely be ap- proaching when it will be practicable to tidy up the balance- sheet and straighten out the liquid position. On last year's profits as much as 8 per cent. was earned on the preference capital, so that even allowing for the. probability that holders will be asked to make some sacrifice in the capital readjustment, the £1 shares do not look dear at 5s. 9d. Behind the prefer- ences is £73,750 in ordinaries which covers the debit balance
on profit and loss account twice over. CusTos.
[Readers' enquiries, or requests for advice, regarding paeticular shares will be answered perindically in piint or-by fetter. Corre- ipondenis. who .do not-desito-their-,..wroze}.14 appear should append initials or a pseudonym to their questions.]
Previous page
