FINANCIAL NOTES
In June last year Reckitt and Sons, the soap and polish manufacturers, and J. and J. Colman, the mustard and starch firm, pooled their businesses in the new firm of Reckitt and Colman, of which company's capital Reckitt and Sons hold 65.6 per cent. and J. and J. Colman 344 per cent. Thus the results for 1938 present a new sort of picture, not exactly comparable with anything which has gone before. The new subsidiary has, before declaring its dividend, made certain reserves which would under the old arrangements have been made by the parent companies.
The year's profit of Reckitt and Colman, amounting to £1,580,149, represents, according to the directors' statement, a reduction of about £50,000 on 1937, even though 1938 sales for the group showed an increase. After charging taxation and various reserves, the operating company hands back to the parents £547,317, this being its pre-incorporation profits and £239,250 in the form of a 51 per cent. dividend on its £6,000,000 capital.
Both parent companies have certain other income besides their shares of the profits of Reckitt and Colman. Thus Reckitt and Sons show a profit for 1938 of £661,610, which is comfortably sufficient to maintain the total distribution of 221 per cent., which has been paid for a long period of years, and to increase the balance to be carried forward from £204,034 to £217,147. This does not include a sum of £387,882 of accumulated earnings of the subsidiary companies from former years which has been carried to reserve. J. and J. Colman made a profit of £309,504, and are maintaining their total distribution at 16 per cent. This company also has a windfall item of £19,600 from the earlier earnings of its subsidiaries, which is added to the undivided profit balance, and makes £125,187 to go forward, against £83,843 brought in.
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