5 MAY 1939, Page 40


Year by year Imperial Chemical Industries fOrtifies its position among the select group of undertakings which, except in abnormally depressed conditions, may be relied on to earn a steady rate of profit. In 1938 net income, as I anticipated, fell somewhat short of the previous year's record level of £7,510,707, but at £7,061,291 it was within £140,000 of the 1936 total. Following their traditionally conservative policy the board have reduced the ordinary dividend from 8f to 8 per cent., a further £1,125,000 has been put to reserve, £172,995 to pensions, and about i65,000 added to the carry-forward. Clearly, the dividend decision was dictated, not by necessity, but by prudence which is, in my view, justified by the obscurity of the out- look for all big concerns with a substantial export business. At 3os. Imperial Chemical ordinary kr units yield just over 51 per cent., not a high return, but reasonable enough in relation to the group's dominating position in the industry and the strong finances it is steadily building up.

I must congratulate the company this year on the way in which it has taken stockholders into its confidence. The accounts are concise, clear and, most important of all, give an adequate picture of the affairs of the whole group. This is achieved through the presentation of consolidated stock accounts covering 125 subsidiaries, many of which operate in territories where exchange restrictions are rigid and values in terms of sterling are difficult to assess. The accounts show that of the huge group balance-sheet total of £113,000,000 fixed assets represent nearly one-half, and over 3o per cent. is in current assets. Reserves are largely invested outside the business in readily-realisable assets, and cash resources are adequate for trading and to cover expan- sion of business.