TRANSPORT , 4 C " Position Here is the full report
of the London Passenger Transport Board which tells the full story of the dismaying fall in revenue which has played such havoc with the dividend on the " C " stock. During the year ended June 30th, it seems, the rate of growth of traffic continued to decline, expenses rose, the Board raised the renewal reserve provision by £145,000 to £2,570,000, reflecting the additional and im- proved assets brought into service, with the result that net traffic receipts, at £3,359,950, were £215,982 less than in the preceding year. That is an unfortunate but comparatively modest decline. It has been supplemented, however, by a fall of some £53,000 in other receipts and an increase of £156,000 in miscellaneous charges, a reflection very largely of the fact that last year's accounts had the benefit of a credit of £230,000 in respect of provisions for income-tax no longer required. Thus, net revenue has fallen by no less than £495,712 to £4,769,322, which is just sufficient to cover the II- per cent. dividend on the " C " stock already announced.
This is a sorry result, and one can detect a note of sym- pathy in the Board's review of the " C " stockholders' position. There is no mention, however, of the negotiations now in progress with the Treasury to determine the financial basis of the Government's control for war purposes. Apparently, no basis has yet been agreed, and stockholders must exercise themselves in patience. As I have already emphasised in these notes, there is a strong case here for generous treatment and, in my view, for ending once and for all the unsatisfactory position in which the " C " stock has a standard dividend rate which it has never received. An opportunity has now arisen to put the " C " stock on a firmer footing. If the Treasury acts as I think it ought, Transport " C " should prove to be worth something more than its official minimum of 65.
Previous page
