Company Notes
By CUSTOS STANDARD BANK OF SOUTH AFRICA. This Bank raised its dividends for the year ended March 31st, 1953, from 10 per cent. to 11 per cent. out of earnings of 22 per cent. In spite of this excellent dividend cover the £2 shares £1 paid at 37s. return as much as 6 per cent. This no doubt reflects the investors' dislike of South African politics but I would sooner hold this share than any gold producer giving the same return. The £1 liability is only callable in the event of the bank being wound up. Another well covered Dominion bank dividend is that of the NATIONAL BANK OF NEW ZEALAND. For the year ending March 31st, 1953, this bank paid 8 per cent. —for the second .time—out of earnings of 20 per cent. A dividend increase in respect of the current year is not impossible. At 65s. the £71 shares £21 paid yield £6 3s. per cent. The call liability of £5 a share may detract from their popularity but it is not in my opinion a very material point. To be more venturesome in this overseas bank market the investor might consider CHARTERED BANK OF INDIA, AUSTRALIA AND CHINA whose £1 fully paid shares at 40s. 6d would return 6.9 per cent, if the dividend of 14 per cent is maintained on the capital raised from £3 millions to £3/ millions by the bonus issue last April. As earnings on the old capital were over 35 per cent. there is a good chance that 14 per cent. will be paid. The title of the bank may repel the investing public but its main branches are in India and Malaya and it will gain from any improve- ment in the Far East trade. As the bank does not appear to have any branches in Australia a change in its title name is in any case overdue. CONNAUGHT ROOMS. Investors who live in London and have sampled the catering at the Connaught Rooms, Great Queen Street, Kingsway, may be intrigued by the declara- tion this week of a one for three share bonus, coming so soon after the 75 per cent, bonus of September, 1952. The trading year does not end until December and in 1052 the Company felt the effects of rising costs, earnings amounting to 67 per cent, to cover dividends of 60 per cent. The new 'shares will rank for the final dividend to be declared next March. Does this bonus suggest that the Connaught is experiencing a little boom. in its catering business which is so susceptible to London prosperity ? At 6s. 6d. cum the ls. bonus shares would return a yield of over 12 per cent, if the 60 per cent. dividend is maintained on the new capital.
ILLINGWORTH MORRIS. This Company's' trading year closed last month and I would. expect that it fully reflected the improvement in the woollen textile trade. Wool prices have risen, so that the Company is not worried by having to write down its in- ventories. For the year to September, 1952, it earned 19 per cent, and paid 10 per cent., and at 6s. 3d, the 4s. shares yield 6.4 per cent. That is no more than it should but there is scope for a rise in dividends on any further improvement in the woollen trade or alternatively for another capitalisation of reserves in view of the strong cash position. At the end of 1951 there was a 100 per cent. share bonus. I am not suggesting that another, bonus is imminent but the final dividend will be declared at the end of January. Giants like Courtaulds may disappoint but the smaller companies in the textile trades should be giving pleasure to their shareholders early next year.
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