Venturers' Corner Even in these dull days, when high yields
on semi- speculative preference shares are common enough, indicated return of over ii per cent. requires a little ex- amination. At 12s. 6d. the 5 per cent. cumulative participat- ing second £1 preference shares of Platt Brothers and Co. (Holdings), the Oldham firm of textile machinery makers and engineers, are offering i i I per cent. on the basis of the full 7 per cent. dividend, which included 2 per cent, in respect of the participating rights, paid for the year ended March 31st, 1938. Has the position deteriorated and, if so, to the extent which would justify such a cautious valuation of the shares? My own feeling is that the current market price is unduly low.
To take the textile machinery export figures first, the show that a further rise took place last year, the 1938 total having risen from £8411,155 to £8,427,413. In this important section of the business, therefore, the position appears to have been well maintained. In the home market orders were scarce, but so they were in 1937, and last year the company must have had the benefit of special Govern- ment work. The accounts, covering the year ending March 31st, will not be available until May, but I shall be surprised if the earnings are materially below those of the preceding year. Even if the second preference dividend should be reduced from 7 per cent. to the basic 5 per cent., a buyer at to-day's price would be getting a yield of 8 per cent., so that it seems to me the risks are pretty liberally allowed for. Platt Brothers (Holdings) 6s. 8d. ordinary shares also look an interesting speculation at 3s. 3d. A year ago they received a 5 per cent. dividend, and it is by no means impossible that this rate will be maintained. If it is, the yield will be rather
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