DUNLOP COMPANY'S STRENGTH As always, the Dunlop Rubber Company has
treated its shareholders well, both as regards the amount of information
it provides and the clarity with which it is set out. It is no mean task to draw up consolidated statements covering the assets and earnings of a world-wide organisation operating in many different currencies several of which are strictly blocked. But the problem has been solved by segregating the blocked assets into a special item, and by disregarding the blocked earnings except in so far as they have been actu- ally transferred into sterling. The net result of this process is an aggregate profit for the whole group of £2,265,469 earned in 1938 against £2,478,000 in 1937. To this must be added a windfall item of £1o9,776, against £25,926. This latter amount represents chiefly the dividends received from those subsidiaries operating within dosed economies, and is composed of profits earned in 1937, and only transferred in 1938.
After payment of the preference dividends of the group, taxation and debenture interest, the net profit of the Dunlop Company is, as announced, only slightly lower at £1,500,893, against £1,591,017. Out of this a total distribution of 9 per cent. has again been made. Once again the reserves of the group have been appreciably strengthened. Total reserves now amount to £5,7o6,335, against £5,409,329, and have risen steadily since 1933, when they stood at £4,346,887. It was announced in the preliminary statement that there had been a marked recovery in trading results, particularly in the last quarter of 1938, and it is understood that this continues. The recovery should be read in conjunction with the fact that inventories of raw rubber and finished goods have been reduced from £3,237,682 to £2,496,324, while cash has risen from L1,616,746- to £2,940,756. This leaves the balance-sheet in a strong liquid position and seems an ideal starting point for further recovery.
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