I.C.I.'s INVESTMENTS
Even Lord McGowan's bitterest critics will not deny the skill and strength of his counter-attack at the Imperial Chemical Industries meeting. This was a fighting speech which rightly began with an explanation of recent adminis- trative changes, took the 1937 accounts in its stride, advanced logically to a very full exposition of the combine's investment policy, and concluded on a note of confidence about the prospects for 1938. Frankly, I feel that after this speech stockholders have little cause for worry. The administrative changes whatever difficulties may have made them impera- tive, should certainly bring definite advantages. In Lord McGowan's phrase, "the board has now forged new links of responsibility and co-ordination on larger issues which should be regarded as a natural development of the policy of decentralisation which has been pursued for many years." In the matter of investments he was able to demonstrate that suggestions that dividends had suffered through losses on investments were entirely groundless. During the eleven years since the combine's formation, it seems, the net result of investment transactions, from a capital standpoint, has been a profit of E3,600,000, all of which, as is only proper, has been applied in capital uses. Judged on the basis of income return, the company's invest- ments have also justified themselves, quite apart from their value to the trading organisation. From the consolidated balance-sheet, which I welcome as a useful addition to the accounts, it is apparent that the liquid position of the group is very strong. Stockholders may therefore concentrate on the earnings outlook as the main factor in the assessment of their position. On this subject Lord McGowan is cautiously hopeful. In certain directions, trade is not so good as in the peak months of 1937, but with its widespread interests the group is fortunate in moving downwards more slowly in a recession and recovering more quickly in an upward mol,e- ment than industry at large. At 315. Imperial Chemiol ordinary units are a sound, although not an exciting, industi :al investment.
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