2 JANUARY 1932, Page 36

Burrisic-AmimicAN TOBACCO. Although the profits of the British-American Tobacco Company

suffered a setback in the year to September 30th last, a reflection of the general depression of trade in the

countries where the company distributes its products, this setback was not unanticipated, for the Chairman at the annual meeting a year ago gave a clear warning as to the probability of a reduced final dividend if trade conditions did not improve. The balance-sheet nevertheless shows an even stronger financial position than in the previous year, owing to reduced stocks in trade and smaller amounts owing by sundry debtors, the liquid assets having increased still more, the cash being more than 21,400,000 higher, while a separate item now appears in respect of Treasury Bills to the amount of £1,450,000, though the short loan deposits, included along with the sundry debtors, are £500,000 lower. As the company is so largely a holding concern, operating through subsidiaries, its own profit statement does not provide a very reliable indication of the extent of the real fluctuation in profit, for it brings into its own accounts only the profits of the subsidiaries to the extent of dividends declared during the year, less any losses sustained by other subsidiaries and not otherwise provided for. That the subsidiaries have always paid dividends on a conservative basis is indicated by the remark in the report of the auditor, Lord Pleader, that the investments in subsidiary companies possess in the aggregate a value largely in excess of the figure shown in the balance-sheet. This figure is over £22,000,000. For the year to September 30th last the company paid a dividend of 20 per cent. free of Income Tax, against 25 per cent, in the previous year, and at the present price of the shares the yield is equivalent to more than 7k per cent., subject to tax. The price of the shares is now substantially lower than it has been for some years back, snaking them a useful investment for those who believe that the world will eventually emerge from the present state of depression and contraction of purchasing power. A. W. W.