FINANCE AND INVESTMENT
By CUSTOS
As so often happens in the home rail market, good dividen announcements have not prevented a relapse in quotations. there be no misunderstanding: with the exception of the Southe which has merely maintained its deferred dividend at r1 per cm the payments for 1942 are thoroughly satisfactory. Great Western' 41 per cent. against 4 per cent., the 21 per cent. against 2 per cen on L.M.S.'and the increase from 21 to 21 per cent, on LN second preference should satisfy everybody. As I expected, th railway directorates have distributed available earnings generous] doubtless influenced by the fact that the actual net revenues hay exceeded the fixed rental by a very large sum. Whether one look for further increases in dividends next year it is hard to sa My feeling is that it would be wise to assume that the rates ju declared are about as much as is likely to be forthcoming and the existing agreement. On this basis the yields offered on s stocks as L.M.S. ordinary and L.N.E. second preference are abo 81 per cent. Nobody will dispute the post-war uncertainties whi cloud the long-term outlook, but I do not think they call for a pet basis nearly twice as high as that on industrial ordinary shares. F this reason there should be a recovery in these home rail mar stocks once the short-term speculators have cleared up their positions SHIPPING PROBLEMS ec A glance at the latest balance-sheet of the Lamport and Hol Line is all that is required to get a picture of what is happen to many of our leading shipping companies. Out of an asse total of £3,203,313 the fleet and wharf properties now account f only £202,285. The balance of over £3,000,000 is represented b liquid items. Small wonder, in these circumstances, that earnin fell sharply last year from £164,984 to £94,788, although the 6 cent. dividend was maintained. Sir Philip Haldin makes no astern to disguise the fact that this fall was due mainly to further hea loss of tqnnage through enemy action. At what cost the company fleet will ultimately be restored is anybody's guess. On thi I question of replacement costs, Sir Philip points out that contrac entered into for the building of two new vessels will amount about £300,000 each, against £175,000 each for the last two vessel contracted for in 1939 and delivered in 194o. He also asks for reversal of the official policy under which vessels built for th Government Pool are not to be transferred to the shipping c panics until six months after the end of hostilities. Many shippin shares, including the 6s. 8d. ordinaries of the Lamport and Holt Lin are now valued in relation to their asiets rather than dividends, an only time will show whether the two will come together aga At Jos. 3d. these 6s. 8d. shares look worth holding in spite of the low yield.
LONDON STORES RESULTS •
It may not delight Lord Kindersley, but it will come as welco news to many investors, that the London retail trade achieved substantial recovery in earnings last year. Here we have Harr showing an increase in its net profit from £560,120 to £74,8 while John Barker has raised its net figure, in this case aft providing for taxation, from £253,748 to £345,056. Although t tion has absorbed most of the increase in Harrods' profits, th ordinary dividend is up from 5 per cent. to 6 per cent. Jo Barker has been content to maintain its to per cent. rate and mak further large transfers to reserves. Neither share yields very muc at current prices, a reflection of investors' confidence in the post war dividend prospect. At 47s., Harrods Li ordinaries . offer return of only 2/ per cent. on the 6 per cent. dividend, but pre-war days the .dividend rate was 16 per cent. The yield John Barker ordinaries at 57s. 6d. is 31 per cent. In this c the pre-war dividend rate was 15 per cent. While I am prepar to see stores' profits fall back from last year's level before r recovery is established, I regard the long-term outlook as good.
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