COMPANY NOTES
By CUSTOS
ALTHOUGH the great £41 million BRITISH PETROLEUM issue is out— scaled down from £50 million by the CIC—there has been little of no
revival in Stock Exchange business. The terms ' should attract every type of investor, for a 6 per cent. convertible debenture stock (1976-80) at 99 is undeniably.attractive. Units of £50 can be con- verted into ten ordinary shares in July, 1958 ,and 1959—equivalent to 99s. a share—and into eight
ordinary shares in 1960—equivalent to 123s. 9d. The shares promptly fell 4s. in the market to 98s. 3d. Other oil shares fell in sympathy except ULTRAMAR. The issue will be 'stagged' for it will go immediately to a premium when dealings start. The British Government is not applying for the stock, which means that its share of the equity will go down from 56 per cent. to 511 per cent. if the stock is fully converted. The BURMAH OIL company is also not applying, but holders of Burmah will have preferential treatment of their applications. The BP directors state that the re- sults for 1957 will not differ materially from those of 1956 in spite of the Suez upset. Sales so far have been above the level of the previous year.
The SHELL issue has been fixed, it is said, for the early part of next year and the rumour around Throgmorton Street—which could net be pinned down by any tribunal to any specific name or class of broker (lop,' top-hatted or hatless)—is that it Will take the form of ordinary shares at a huge discount, if not at par. This issue should be more popular with investors perhaps than BP, for the Shell political risks are much more widely distributed round the world. Moreover, the in- crease in its earnings this year has been remark- able. The third-quarter report shows that the value of sales, excluding duties, was slightly down but well up (13 per cent.) on the third quarter of 1956. Profit margins and net income were also slightly lower, but for the nine months the net profits were no less than 26+ per cent. above those of the corresponding period of 1956. Capital and exploration expenditures in this period have risen by 8 per cent. to £273 million, and the long-term debt is higher by £21 million at £186f million. This explains the need for further financing. 11 fourth-quarter results may not be so good, but fi the full year the ROYAL DUTCH-SHELL record profitable growth should be outstanding.
The only market which is active and strof remains that in brewery shares. I referred a for night ago to the attraction of BASS on a Yie basis. This has been further enhanced this Wet by the increase in its final dividend, making' per cult. against 43 per cent. Earnings at 103 P' cent. were sufficient to cover the new divider about 2+ times. Profits before tax were 28 P cent. higher than a year ago. The shares jurnPi 8s. and at 128s. 9d. cum final dividend the Yie is still the attractive one of 7-1 per cent. 11 market, however, is grumbling at the absence ' a scrip bonus. HAMMONDS UNITED BREWERIES also increasing its dividend—to 14 per can against 131 per cent.—and with a rise of 1-I P' cent. in profits (before tax) earnings were suiliciel to cover the dividend 1.85 times. At 9s. 3d. it 5s. shares yield 7.7 per cent.
Mr. Bedford, the chairman of DEBENHAMS, 11` again made it clear to shareholders that the grov is bent on taking over a 'popular' chain stol business. The bid for HOPES did not succee against Mr. Isaac Wolfson, but Mr. Bedford hi got his finance ready by increasing the unissue capital from £1+ to £5 million (some of whic may be issued as preference shares when the till comes). In the meantime investors can hold if shares with a comfortable feeling that the ye' capable board knows what it is doing. It is io completing its modernisation and building PEI gramme (it is rightly postponing further buildir while money is so dear) and has put itself in fun( by the £2,200,000 'rights' issue. It has a wide rant of stores catering for what it calls the 'high class 'middle class' and 'popular' trades and in the ye to July their net profits were nearly 7 per cell up. The 27+ per cent. dividend was covered l earnings of 41+ per cent. At 36s. 3d. the 10' shares yield 7+ per cent. which is over 1 per cell' more than the yield on UNITED DRAPERY. e If
6 It IS I.
ie St IS
t.
Previous page
