Company Notes
By CUSTOS GOOD dividend news is keeping the share markets firm, if not very active. Con- stantly a company annbuncemult is made which reveals how cheaply a share has been selling. Take, for example, TURNER AND NEWALL which has just declared a final dividend of 15 per cent., making 171 per cent. for the year to September last. This is equivalent to 35 per cent. on the capital before the one-for-one share bonus, that is, it means raising the new distr Nation rate of 121 per cent. by five points. N..t profits arc only slightly higher but the new dividend appears to be covered about four and half times. The shares have risen to 69s. 3d, to yield £5 Is. per cent, and, in view of the growth possibilities of the asbestos industry, are still reasonably valued. Yet these shares have been as low as 38s. 101d, this year.
BRITISH BORNEO PETROLEUM, a " holding " company is not nearly so speculative as it sounds. It derives 87 per cent. of its income from royalties paid (at a fixed rate of Is. a ton) by a subsidiary of the Shell group on the production of oil from the fields in Brunei, British Borneo, which it holds on a very long lease. The balance of its income comes mainly from a substantial holding in Apex Trinidad. What makes the share interesting today is that the Shell group is forging ahead with the development of the. Borneo fields which are now producing over 51 million tons a year. Apart from its increasing royalty income from Shell the company will receive in the year ending next March a larger dividend from its hold- ing in Apex Trinidad. In the previous year British Borneo Petroleum earned 35.4 per cent. and paid 19.4 per cent, tax free on a capital of £300,000 which had been increased by a £50,000 bonus issue in 1952. It is significant that in the past five years it has slightly increased its dividend each year and it will probably do the same this year. Sooner or later it will also have to bring its issued capital more into line with its real assets. Its royalty investments stand in the books at a nominal £10 but capitalising the royalty income of £253,000 last year on the basis of, say, 15 per cent., the figure would be over £1,700,000. This would give a theoretical break-up value to the Gs. ordinary stock units of over 46s. They appear cheap at 33s. 9d. to yield £6 6s. per cent. gross on last year's tax free dividend.
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