27 JANUARY 1939, Page 38

Venturers' Corner At long last Sheffield Steel Products is to

carry through a capital reconstruction scheme, as a result of which its Lioo ordinary stock, now quoted around £12, will be written down by two-thirds of its nominal value. That means that a buyer of the stock at today's price is really giving about 7s. in the £ for the ordinary capital on its reduced basis.

In my view the quotation does less than justice to the company's earnings possibilities in anything like reasonable trading conditions. In recent years the board has greatly improved the position by trimming down the business and concentrating on the development of a manageable nucleus of undertakings, and this policy has already borne fruit. For the year ended March 31st, 1938, net profits, after debenture interest, rose from £4,243 to £25,691. I do not know whether such a figure can be regarded as in any sense a " normal " level of profits, but it is obvious that if it is, i t would earn a modest dividend on the reduced ordinary capital, as well as an appropriation of, say, £ io,000 for