Company Notes
HERE is no halt in the profits of Great Uni- versal Stores for the year ended March 31, 1961, for once again record figures have been achieved with profits (before tax) up by about £11 million to £26 million; this is in excess of the average increase over the past five years. An outstanding record. The tax charge has increased to £13,913,000, which includes £650,000 attribut- able to the new rate of profits tax. The net profit works out at £11,827,302 against £11,419,241. Capital reserves of the group, now £106 million, have passed the £100 million mark for the first time. The most able chairman and managing director, Mr. Isaac Wolfson, tells stockholders that at home the multiple-shop and mail-order sections have in particular shown continued growth, whilst their overseas interests in Canada and South Africa have been main- tained on a profitable basis. The point to note, from the chairman's statement, is that the com- pany's profits merited a higher total dividend than 374 per cent., which would have been paid had it not been for the Chancellor of the Exchequer's request for dividend restraint. But stockholders will ultimately benefit from the re- tention of profits. These over the past ten years have risen from £2.8 million after tax to £13.4 million. There is obviously room for further growth in this wonderful stock. With a cash flow of £9.7 million and a twofold cover for the divi- dend, the 5s. 'A' ordinary at 39s. 3d., yielding 3.9 per cent., must be an attractive investment for the future.
The provision of £5 million of long-term loan finance by Sun Life Assurance has enabled Hallmark Securities to broaden their field of investment by taking an interest in shop and
office property for the first time. These develop- ments, which are now taking place at Tolworth (Surrey), Brighton, Eastbourne and Shepherds Bush and Fetter Lane (London), should add, says the chairman, Mr. Sidney Bloch, £120,000 to the gross rental by the end of 1962. It is the intention of the board to double the present rate of property investment over the next five years. The company's other interests include the manufacture of domestic water fittings through Barking Brassware, E. E. Reed and Co. (Builders) and an industrial banking subsidiary. The activities of the last-mentioned have been severely restricted since April, the board finding it more profitable to provide short-term building finance. The company is well placed to profit from prudent investment in the past in acquiring land, which has undoubtedly appreciated over the last few years. In the twelve months to August 31, 1961, the company has purchased building land amounting to £1.2 million. Profit figures for the year to April 30, 1961, are not really comparable with those of 1960. Pre-tax profits were £551,332 and the 60 per cent. divi- dend was covered more than two and a half times. The dividend has been increased to 60 per cent. and would have been more, were it not for the restraint requested by the Chancellor of the Exchequer. A one-for-ten scrip issue is to be made and with the maintained rate of divi- dend, which is the minimum, the Is. shares, on a 66 per cent. dividend basis at 28s. 6d., yield 2.3 per cent. The board has recently been streng- thened by the appointment of Mr. Herbert Ashworth as general manager. His knowledge and great experience of the property market enhance the value of the shares as an invest- ment with definite prospects for appreciation.
In reporting new record profits for Spark Holdings for the year to April 30, 1961, the chairman, Mr. John G. Lawson, is optimistic that these will be surpassed in the current year. This is very encouraging. The latest report can- not really be compared with the previous one for a thirteen-month period as various sub- sidiaries have been acquired whose profits brought in cover different periods. However, the chairman has given a most comprehensive re- port and has simplified the consolidated figures, which indicate that the pre-tax profit has risen by about 33 per cent. from £319,000 to £425,000. The group now covers four companies in the engineering section, which is responsible for over 50 per cent. of the profits, the metallurgical and foundry section contributing 30 per cent., and the balance coming from the textile section (this includes Bonsoir Ltd.); the only unprofit- able section is that of timber and plywood, which was hit by the recession in the furniture trade. Last year the capital was doubled by a scrip issue and it is now proposed to make a one-for-five scrip issue and to make the total dividend up to 45 per cent. by a final payment of 274 per cent. Higher earnings can confidently be expected for the current year. The 2s. shares at 13s. 9d., yielding 6.5 per cent., are reasonably priced and have good prospects for the future.
Vitamins have had exceptional difficulties during the past three years. These have been partly overcome during the year ended March 31, 1961. There were heavy stock losses in 1959-60 due to exceptional imports of certain proteins from South America. But pre-tax profits of £254,074 are better than those of last year, though still below the 1959 figure. The company produces fine chemicals and bulk vitamins, and in spite of production costs per ton being lower than ever before, increasing competition from Germany, Switzerland, Japan and the US has cut into profit margins. The chairman, Mr. H. C. Graves, admits that the future will still be very competitive unless this country enters the European Common Market, whereon the outlook for the company would immediately change for the better. Taking a long-term view, there is potential growth in the 5s. shares, but at 10s. 6d. they now appear fully valued on the 124 per cent. dividend.
`What d'you mean-you'll have to have notice of that question?'
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