COMPA N Y NOTES
THE interim statement for the first half of the 1958 trading year of British Insulated and Callenders Cables showed a decline in sales of £5 million. It is therefore a pleasant surprise to find that the results for the full year show a con- siderable improvement over those for 1957. The trading profit has increased from £7,832,872, to £8,808,610 (a rise of nearly 12 per cent.) and the net profit (after tax) from £2,868,284 to £3,118,979. These excellent results have pro- vided increased cover of 33.3 per cent, for the dividend of 13.5 per cent., which has been stepped up 1 per cent. In January of this year BICC acquired the Telegraph Construction Co., makers of electric power cables, insulating materials and magnetic alloys, all of which are complementary to the parent company's business, which, apart from its cable products, includes capacitors, space-heating equipment, meters, radio masts, etc. With the co-ordination of the two com- panies, results for 1959 should ensure at least a 'same again' dividend; there is room for an increase. At 56s, 6d. a yield of 4.74 per cent. can be obtained on this 'blue chip' investment. The group has now built up a strong balance
sheet with reserves exceeding £32 million against the issued ordinary capital of £171 million. The board have declared a more liberal dividend policy for the future; it would not be surprising to hear that they also intend to make a scrip issue.
There is not sufficient space in these notes to do justice to the amazing expansion of Birmingham Sound Reproducers over the past two years. The dividend has been nearly doubled on the 5s. ordinary shares since they were introduced to the market around 10s. each in May, 1957, the capital has been increased by scrip issues of 60 per cent. and 25 per cent., the issued capital is now £1 million. Net profit (after tax) for 1958 was £810,780 and compares with £722,782 for 1957. An interim dividend of 15 per cent. was paid on capital of £800,000 and a final of 321 per cent. has been declared on the present capital; the total is equivalent to 44.5 per cent, as against the equivalent of 22.5 per cent, for 1957. This pay- ment is covered more than three times by earnings. It should be mentioned that the sale of gramo- phone records has recently shown a sharp decline, which foreshadows a falling-off in the demand for the company's automatic record changers, the largest item in the group's sales, but the company is entering new fields of business, such as tape recorders, and the 5s. ordinary shares still look attractive at 35s. to yield 6.2 per cent.
The results for 1958 of London Brick, the largest producer of bricks in the world, can be considered very satisfactory. Group trading profits were .€2,589,211 and net profits. (after tax) were £960,737 against £952,452. Since the interim divi- dend of 71 per cent, the capital has been increased to £5.2 million, so that the final dividend of 10 per cent, makes the total equivalent of 17 per cent. The company has spent large sums on technical research, laboratories and mechanisation and is very well placed to reap the reward from increas- ing activity in the building industry which is now apparent. Recently a new facing brick, 'Phorpres Heather Facing,' was produced, for which there is a good demand and which makes a useful addi- tion to the range already produced. The com- pany, besides its brickmaking, controls Trans- formers (Watford) Ltd., which has a large export business to such countries as South Africa, New Zealand and Malaya. The £1 ordinary shares at 70s. are an excellent investment as the leader in this industry to yield 4.8 per cent.
In his report for 1958 the chairman of Rhodesia Broken Hill, Mr. Harry Oppenheimer, deals thoroughly with the difficulties of the extraction of metals from complex ores and the economic problem of oxidised products. New extraction plant is to be installed (the cost of which cannot at present be estimated but which will presum- ably be justified as recent exploratory work has proved ore reserves to give the mine a prospective life of twenty-five years). This long-term develop- ment will of course require some additional capital which in time will produce results, but the immediate outlook for shareholders is not very bright. Protits before tax have fallen from £1,259,219 to £772,739 and the dividend on the 5s. ordinary shares has been reduced from ltd. to 9d. (15 per cent.) so that at 8s. 3d. the yield of 8,6 per cent. is one that reflects the long view.
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