Financial Notes

A NOTABLE RECOVERY.

THE latest accounts of the Rhodesian Railways Ltd. and the Mashonaland Railway, whose share capital is mainly held by the Rhodesia Railways Trust, which in turn is controlled by the British South African Company, show that the corn- (Continued on page 1062.)

Financial Notes

(Continued from page 11)60.)

panics experienced a notable recovery last year. The Rhodesian Railways obtained a gross revenue of £2,377,716, or an increase of £337,000, while on the Mashonaland Railway, receipts were /192,000 higher at /1,414,000. Moreover, the' rise in working expenses was relatively-small, so that the companies secure respectively 1275,000 and .£135,000 as net revenue. The profit of the Rhodesia Railways was £415,680, including /86,340 from sales of investments. The sum of 167,428 has been placed to Rates Stabilisation Account and 1348,252 to credit of the Reserve Account, raising it to 11.040,539. There was a Credit on the dividend account, a sum of /135,226 representing part of the profit earned in the year to September 30th, 1931, but payment was then post- poned, owing to the necessity of conserving resources in view of the trade depression. The Board now recommend that 167,500, less taxation, be distributed in dividends. The improvement is attributed chiefly to the satisfactory results of the gold mining industry in Southern Rhodesia and of the copper mining industry in Northern Rhodesia.

* * • * a

BANKING IN THE DOMINIONS.

Prom the time of its formation onwards, the Reports of Barclays Bank (Dominion, Colonial and Overseas) have presented records of almost uninterrupted progress, and the latest Report, for the half-year ended March 31st" last, is again an encouraging one, both as regards profit-earning power and a sound balance-sheet. Moreover, the latter also indicates continued progress in the bank's activities, the aggregate figures for the first time exceeding 1100,000,000, a figure which compares with something like 175,000,000 only a few years ago. During the past year the deposits have risen by over 12,000,000 and now stand at £88,286,000. Against this are very liquid assets, the Cash in Hand and Money at Cal amounting to over 128,000,000 and Bills Discounted to over. £10,000,000, while gilt-edged securities in the shape of British Government and Colonial stocks aggregated over 124,000,000. A particularly good point, however, in the bilance-sheet as suggesting greater business activities in the area of the bank's operations is the rise of over 12,000,000 in advances to customers and other accounts.

* * a * BURMA!! OIL PROFITS.

The recent disappointing dividend announcement by the Anglo-Iranian Oil Company was in striking contrast with the good report of the Burmah Oil Company, which showed a profit for 1935 of 12,678,161, against 12,187,638. The increase attributable to the company's own trading was 1275,000, including a payment of £46,795 in respect of repay- ment of Debentures in a subsidiary company which had previously been written off. Interest and dividend from Investments brought in a further 1215,543. The larger interest income was doubtless due, in part, to the increased dividend paid last year by Anglo-Iranian Oil, in which the Burnish Company holds 12,861,990 of Ordinary Stock. Inasmuch as this stock is valued in the balance-sheet on the basis of only us. 84d. per £1, it is evident that there is a very large hidden reserve in that item.

* * * *

A PLEASANT SURPRISE.

Whether the Queen Mary' will prove the turning point in the financial fortunes of the Cunard Company remains to be seen, but her construction has manifestly benefited the finances of her shipbuilders, John Brown and Co. That company, of course, has benefited by the general improve- ment in the iron, coal and steel trades, and the company announces the payment on July 1st next of a dividend of Is. per share, free of tax, on the written-down shares of Os. each, which is equivalent to 5 per cent., tax free, on the original Ordinary share values. The last dividend paid was in respect of 1924-25, and, needless to say, the shares have responded to the improved fortunes, for the Os. shares now stand at 26s.

* * * * CANADIAN CREDIT.

On more than one occasion I have referred to the damage which is being inflicted upon Canadian credit by the defaults by some of the Canadian Provinces. During the past week a feature in markets has been the fall of 10 points in Alberta 44 per cents. of 1943 and the 5 per cents. of 1962-1967. Dealings were merely nominal; the fall itself was in response to a Reuter cable stating that as from June 1st Alberta would pay 24 per. cent. interest on all securities instead of an average rate of 5 per cent. According to the cables, this arbitrary declaration was made by Mr. Aberhart, the Social Credit Premier of Alberta.

* * * *

THE RISE IN STEEL PRICES.

Whether the further advance in the prices for steel is to be welcomed from the general standpoint of British industry is open to question, but naturally the effect on the market for Steel shares has been good. Before the announcement of the rise came, Steel shares were inclined to react on profit- taking following the long-sustained rise, but a rally has taken place and may possibly go further.

* a * * GUEST KEEN RESULTS.

Meanwhile, the preliminary profit statement by Guest, Keen and Nettlefolds, Ltd., for the year ending March 31st last is a good one, showing that after providing for Debenture interest and for redemption of Debenture Stocks, the profits amounted to approximately 1940,000, against /925,000 for the previous year. Once again, £50,000 is put aside for Depreciation, with 175,000 for Obsolescence. A year ago a sum of £471,000 was required to bring the Preference dividend payments up to date and now the Directors propose providing £100,000 for writings-off under the Works Reorganisation Scheme and a final dividend on the First and Second Pre- ference Stocks and on the Ordinary Stock of 24 per cent., tax free, making 5 per cent., tax free, on the latter,- which received no dividend for the previous year.

* * * * RECORD PROFITS.

The upward tendency of profits in the case of J. Lyons and Co. seems by no means to have reached its limits. Two years ago record profits were published; only to be exceeded in the following year by a further slight increase, which again is exceeded in .the year 1935-36.- Moreoverra feature of the Company's record is the steadiness of the earnings, for although the past year' § figures constitute a record, there is only a difference of about £1,500.between the present profits of 11,01.1,000 and those of the previous year. A sum of /100,000 is again placed to the Reserve, while the dividend on the Ordinary Shares is maintained at 224 per cent. The balance-sheet shows an increase in fixed assets._of £435,000.

(Continued on-page 1064.) - — -

Financial Notes

(Continued from page 1062.) " EQUITABLE " RESULTS.

The Equitable Life Assurance Society, or, as it is often affectionately styled, the " Old " Equitable, held its 174th annual meeting of members last week, when the Chairman, Mr. H. L. M. Tritton, was able to state that the Society's net interest earnings for the year represented over 4i per cent. net upon its funds, which, he said, was partly owing to the fact that investments were not written up in the Company's books. He pointed out, however, that owing to the difficulty of finding new investments at anything like that rate, it could not be expected that the next few years' accounts would reproduce that figure. In its valuation for the past quin- quennium the Equitable has reduced its assumed rate of interest from 4 to 3i per cent. While the Society values upon the " bonus reserve principle" and its valuation liability allows for the continuance of bonus on the existing scale, Mr. Tritton pointed out that the assumption does not mean that the bonus can be guaranteed, as a continued fall in the rate of interest might make it impossible. Meanwhile, however, it is good to note that the Equitable has carried fonvard 1140,000 more to the next quinquennium.

ELECTRICITY PROGRESS.

The latest Report of Edmundsons Electricity Corporation covering the year ended March 31st last shows that the company has been making steady and even remarkable progress during the past three years. Thus, for the year ended March, 1934, the net profit was /403,000, for the following year it was 1459,000, and for the past year 1510,000. The consolidated statement of assets and liabilities also shows similar progress, the surplus in the latest balance-sheet being 11,919,000, as compared with 11,542,000 two years previously.

A. W. K.