Venturers' Corner
Yields of 9 per cent. on the equities of small industrial companies are common enough nowadays, but I think there are instances in which the market has registered its scepticism rather too drastically. It is difficult to believe, for example, that the 5s. shares of Veritys, the electric motor and industrial lighting fittings manufacturers, would not be valued substan- tially higher than the current level of 5s. 6d. in a more hopeful market atmosphere. This company reorganised its capital two years ago and now has a clean balance-sheet. In 1936 it made a net profit, after depreciation, of £10,463, but ploughed the earnings back into its expanding business. The 1937 accounts show a further big improvement.
Net profits have jumped to £41,499, equivalent to 391 per cent. on the 5s. ordinary shares, and the board has demon- strated its good sense by putting £30,000, or roughly three- quarters of the available earnings, to general reserve, and restricting the dividend to io per cent. There is a record volume of orders in hand, and although export business must still be difficult, I should expect the 1938 results to be quite satisfactory. At 5s. 6d. a buyer at least starts off on a reason- able basis, with a dividend yield of 9 per cent. and an earnings yield of 35 per cent. As a lock-up speculation the shares do
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