COMPANY NOTES
HE immediate outlook for the paper-making I industry is healthier than it has been for some time. Profits of Inveresk Paper for the year to September 30, 1959, record a sharp increase over the two previous years and were achieved in spite of the damaging strike in the printing industry. Net profit after tax rose from £1,055,512 to £1,255,479, representing earnings of 29.8 per cent. This is strong cover for the dividend in- creased from 8 per cent. to 10 per cent. tax-free. The net value of the fixed assets at the year-end amounted to £10.74 million. To provide for fur- ther expansion the directors have decided to create a further 1,925,684 10s. ordinary shares to be issued at their discretion. They are also capi- talising £2.61 million of reserves by writing up the existing 6s. ordinary shares to 10s. each. This is an excellently managed company and no mat- ter what lies ahead, it is well placed to meet com- petition and finance a big expansion programme with cash resources exceeding £4 million against liabilities of only £2.5 million. The ordinary shares at 22s. 3d. yielding 4.4 per cent. are well worth putting away.
The figures for 1959 of Achille Serre, the well- known dyers and cleaners, include four months' figures from two recently acquired subsidiaries, namely Boltons and Beckers, and two months' figures from Scottish Dyers and Cleaners (Lon- don), so that the full benefit from these concerns will not be reflected until the next accounts. It is now proposed to make a one-for-four rights issue at 12s. 6d. a share, presumably to reduce bank loans which were raised partly to pay for the recent acquisitions. Earnings have increased from 28.3 per cent. to 33.7 per cent.; the dividend is being raised from 16 per cent. to 17+ per cent. and, assuming that this rate will be paid on the larger capital, the 5s. ordinary shares certainly look attractive at I4s. 6d. (ex rights) to yield 6.0 per cent.
Kuala Kangsar Plantations is one of the higher-yielding estates, as large areas of re- planted rubber are yielding over 1,000 lb. per acre, while 22 per cent. of the tappable acreage is still under seedling stock. For the year to Octo- ber 31, 1959, a better price for the larger crop (2,253,000 lb. against 1,931,000) was of course obtained, resulting in an increase of 40 per cent. in the trading profit. The net profit after tax rose from £51,057 to £72,087, permitting an increase in the dividend from 22+ per cent, to 37f per cent. In another two years this estate will be producing a much larger crop and with the present price of rubber at around 34d. per'lb. prospects look good, so that the 2s. ordinary shares at 6s. 9d. yielding 11.5 per cent. are not overvalued.
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