FINANCE AND INVESTMENT
By CUSTOS MARICETS are quiet, but they are good underneath. Invasion talk, plus the normal holiday influences, are inhibiting would-be buyers, and I doubt whether we shall see much activity in Throgmorton Street before the end of the year. It is very rare indeed, however, for a new year to open without some attempt at optimism, and 1941 starts with the solid advantage of a substantial pay-out for requisitioned American stocks on January 14th.
BARCLAYS BANK (D.C. AND 0.) At the meeting of Barclays Bank (Dominion, Colonial and Overseas) the chairman, Sir John Caulcutt, showed that last year's satisfactory earnings were based on a high level of economic activity in South Africa. Loss of Continental markets which formerly absorbed a large proportion of the UniOn's wool and maize exports had been made good by arrangements under which these two commodities were being sold to Great Britain. Sir John emphasised the immense significance of the measures taken by the British Government to purchase so many of the primary products and surpluses which may be offering. While this policy had the effect at the outset of preventing any undue rise in prices, it was of great help to producers in the long run in giving them an assured and stable market.
SCOTTISH BANKER ON E.P.T.
At the National Bank of Scotland meeting the Marquess of Zetland added his voice to the growing chorus of criticism of moo per cent. Excess Profits Tax. If E.P.T. is maintained at this rate, how will industry be able to replace machinery and equip- ment worn out by continued pressure during the war? He thought the only satisfactory solution was a reduction of the moo per cent. rate which would also have the desirable effect of providing a much-needed inducement to traders to keep costs down. Discussing the bank's advances, he disclosed that, in spite of the reduction in the total, credit had been extended " more largely than usual " to the distributive trades in the financing of heavier stocks.
SOUTH WEST AFRICA COMPANY During the year to June 30th the South West Africa Company has not only doubled its dividend at io per cent., but considerably strengthened its financial position. In his survey at last week's meeting Mr. Sidney Hunter Boileau explained in detail the state
(Contiued on page 71o.) of the investment reserve account. A reduction in this item from Li5o,00n to £105,089 reflected the actual loss sustained by realising certain investments. This had been done to make funds available for the capital repayment, while alterations in the port- folio had been made with the object of changing from undated into dated securities. He disclosed that the depreciation on the investment portfolio at June 3oth was rather less than L91,000 as against an investment reserve account of £105,089. Today the depreciation is substantially reduced.
CONSTABLE, HART RECOVERY
Constable, Hart and Company, the road constructors and con- tractors, have sprung a pleasant surprise this year by doubling their dividend at 8 per cent. Earnings for the year to Septem- ber 3oth showed a sharp recovery at £23,264, against £13,199, both these figures being struck after taxation. The 8 per cent. dividend was paid out of available earnings of 15 per cent. and L15,000 has gone to general reserve. This reserve, as Mr. H. H. Holmes, the chairman, explained at the meeting, has been reduced by £24,000, the directors having decided to write off the com- pany's interests in land development schemes. A sum of L16,500 has been written off shareholdings in land companies and £7,500 have been drawn from general reserve to cover debts owed by land companies. As to trading prospects, Mr. Holmes was cautiously confident. Although war has caused a great falling off of contracts for country and local authorities, it had also brought sharp increases in work done for Government departments.
CARRERAS PROSPECTS
Year after year Carreras, the tobacco manufacturers, establish new records of gross earnings. In the year to October 31st gross profits rose from L2,085,960 to £2,204,970. So deeply has taxation eaten into these earnings, however, that the net profit, after taxation, was down from £1,411,627 to £1,030,316 and the ordinary dividend has been reduced from 3o to 26i per cent. At the annual meeting Mr. Edward S. Baron made no secret of the difficult conditions in which the combine is now operating. He showed that the strong position built up before the war in relation to stocks of leaf had been weakened partly by losses from enemy action. The point had now been reached when substantial re- plenishments of stocks were essential if the company was to meet demand at the current high rate. He, therefore, put in a plea for a relaxation of the import and currency restrictions which now covered the purchases of tobacco from America.
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