I.C.I. POSITION CLARIFIED
The Imperial Chemicals figures are at once a relief to share- holders and a sore disappointment to the " bears." A rise of £307,378, in a net profit total of over L7,5oo,000, is not spectacular, but it gives the lie to the insidious voice of rumour. After increasing the allocation to the central obsolescence fund from £1,000,000 to £1,500,000, and the tax allocation from £846,093, to £1,171,862, the board has maintained the general reserve transfer at Lr,soo,000, and has seen fit to raise the ordinary dividend from 8 to 8i per cent. This seems to me to be conservative finance and so is the board's treatment of the investment position. After the sale of certain holdings the year-end valuation disclosed a depreciation on book value of £1,824,066, largely on German investments. To meet this depreciation the board is transferring L1,500,000 from general reserve, which will still stand at something over Li r,000,000, leaving £324,066 uncovered.
On the strength of these preliminary figures the LI ordinary units hai,e rallied from 28s. to 29s. 6d., at which the yield is 6 per cent. Are they too cheaply priced as a front-rank British industrial ? My own feeling is that the price is just about the right one, first because I should like to see how the reorganised system of administration compares with the old system in delivering the goods and, second, because I suspect that the combine's trading has fallen off during recent months. The explosives and metals sections are doubtless continuing to do well, but what about the important dyestuffs, alkali, fertiliser, cement and paint sections ? I could think of reasons for supposing that demand in most of these branches has fallen considerably from the peak levels touched about a year ago.
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