Company Notes
By CUSTOS of the national Press that they opened on Monday at 77s. 9d. and were quickly pushed
up by eager public buying to 80s. 6d. before
relapsing to 78s. 6d. I have often recom- mended Marks and Spencer—for example at 67s. 6d. in November—and on Dec- ember 11th 1 suggested that their stores might have done relatively better than WOOLWORTHS last year. An increase of 17 per cent, in net profits at £6.7 millions which Woolworths reported on Saturday was considered a. good pointer for Marks and Spencer and I advise retention of the shares even if they rise over 80s. The dividend may well be increased to 80 per cent. for the year ending March, three months of which will be free of Excess Profits Levy. I repeat what I said before— that the best of all " growth " stocks should find a place in every investor's portfolio.
I notice that the City Editor of the Sunday Dispatch has a more speculative following than that of his colleague on the Express. But it is none the less faithful. Last Sunday this gentleman, who has been very bullish of gold shares, tipped WESTERN REEF at 603. for a 20s. rise. The shares had been 57s. 6d. on Friday, were marked up to 62s. 6d. on Monday and relapsed on Wednesday to 59s. 6d. My colleague on this page drew attention to these shares in November when they were quoted at 45s. and the subsequent rise has been fully justified by the excellent uranium profits it reported for the quarter .ending December. When the uranium plant is in full operation dividends could be increased from the present 2s, 6d. to 5s. 6d. per share. The shares can be regarded as a good speculative investment—that is, when they are not being tipped in Sunday papers.
MCDOUGALLS TRUST has deservedly enjoyed a better• market since it raised its dividend from 10 per cent. to 12 per cent. This com- pany owns the shares of McDougalls Ltd., self-raising flour and, being a holding com- pany, can legitimately pursue a generous distribution policy. For the year to August, 1953, it earned over 18 per cent. against 121 per cent. in the previous year and A is reasonable to anticipate still higher earn- ings in the current year. When wheat was decontrolled last summer the Government asked the millers to help them by taking and storing home-produced wheat at Govern- ment expense. The millers do not have to pay for it until they use, it and then only at world market prices. Thus, the Govern- ment is financing the millers' stock-holding until next season. Thereafter the millers will have to finance themselves but they will be free to buy in the cheapest market and as prices have fallen they will have less money locked up in stocks. The Govern- ment will, of course, be paying out more in subsidies to our farmers who will be claim- ing the difference between the world market price and the protected home. price. The milling trade is not generally happy about its prospects but McDougalls is specialised they concentrate on selling self-raising flour to the housewife for the making of cakes and pastries. Their successful advertising of a line product has given this well-man- aged company a good Lad over their com- petitors which 1 understand they are fully maintaining. At 40s. to yield 6 per cunt. the shares are not over-valued.
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