HOME RAILWAY POSITION
We still need the full accounts of the London and North Eastern to complete the home railway story, but the L.N.E.R.'s preliminary figures look very good. To pay 1 per cent. on the second preference costs an additional £826,000, and, allowing for the allocation to contingencies and the increase in the carry forward, one may deduce that the net revenue was roughly L990,000 higher last year than in 1936. This makes the £308,000 increase on the L.M.S. look very meagre indeed, and I cannot help thinking that differences in methods of accounting must be held responsible for part of this discrepancy. In these days nobody will wonder at the lack of enthusiasm for home railway ordinary stocks, despite the increase in dividends, but the declines in the prior charge issues do not make sense. Here is the position at a glance : Net Revenue Current Yield
After Dividend.
£
s. d.
L.M.S. 4 p.c. First Preference 3,100,000 8o 5 0 0 L.M.S. 1923 4 p.c. Preference 1,500,000 62 6 8 6 L.N.E.R. 4 p.c. First Preference Southern 5 p.c. Preferred .. 1,320,000 480,000
62 8o
6 6 8 6 5 o
Yields ranging between 5 and 6f per cent. are, in my view, decidedly attractive in relation to such strong cover, the net revenue, after payment of the dividends being quite substantial by reference to the companies' total earnings. Although I do not look for any marked rise in the net revenues of the railways in 1938, I see no reason why the 1937 figures should not be well maintained.
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