Company Notes
By CUSTOS ASSOCIATED ELECTRICAL INDUSTRIES, It 0 still possible to buy the new shares of this company (arising from the 100 per cent. bonus) at around 43s. free of stamp. If the next dividend is to be halved on the doubled capital the yield at this price would be only £4 12s. per cent. but as last year's earnings covered the dividend more than four times it is reasonable to expect that the rate of distribution will be slightly increased, say, from lb per cent. to 121 per cent. The yield would then be £5 15s. per cent. We must wait until February before the final dividend settles this point but in the meantime investors cannot go far wrong in choosing a share which returns an earnings yield of 20 per cent.. Among the leaders in this industry the next best yield on earnings, namely 18 per cent., is offered by ENGLISH ELECTRIC which gives the investor an interest also in the aircraft industry through its Can- berra bomber. At 57s. English Electric return a cash yield of 51 per cent., the dividend of 15 per cent. being covered 31 times. This might also be increased, for Excess Profits Levy has been taking the equivalent of 13 per 'cent.
PLESSEY COMPANY. As an index of the prosperity of the light engineering industry the investor might follow the fortunes of the highly efficient Plessey Company. Its results and final dividend for the year ended June 30th, 1953, which will be announced in a month's time, are being eagerly awaited in the market which has run the 5s. shares up to 29s. 6d. The company mass-produces an extensive range of components used in electrical and light engineering and by the radio, telegraphy, telephony, aircraft and motor trades. In the previous year it earned 158 pert cent. and paid a modest 25 per cent. It has been badly caught by the 'Excess Profits Levy which has been absorbing £158,800 a year against only £32,800 het for the equity dividend. In fact, the Levy is equivalent to 115 per cent. gross on the ordinary share capital. The market is clearly expecting an increase in the final dividend, for at 29s. 6d. the shares yield only 4.2 per cent. on last year's distribution. But there may be more to it than a higher dividend. The last balance sheet revealed net tangible assets of over £2,000,000 avail- able for the equity which has a nominal capital of only £250,000. Sooner or later the issued capital must be made more realistic.
SAMUEL WILLIAMS. It is unusual to obtain a yield from a real estate company of 7 per cent. without excessive risk but as a result of the liquidation of a line of shares in the market this, can be secured on the 5s. Ordinary shares of Samuel Williams at 12s. 6d. This company owns the Dagenham Dock estate of 350 acres and carries on the usual business of an industrial estate com- pany complete with docks servicing the discharge and loading of ships. In view of the growing industrialisation of the Thames estuary its mile-long river frontage must be an increasingly valuable asset. For the year to ,March, 1953, it earned 20.6 per cent. and paid 171 per cent. The usual interim dividend of 71 per cent. is expected to be declared this week.
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