Venturers' Corner One hesitates, in these days, to recommend warehousing
and textile shares, but quotations are so low that I feel that a buyer is probably getting in on attractive terms. The case of Cook, Son and Co. (St. Paul's) preference shares seems to me as interesting as any. These are LI cumula- tive preferences, carrying a 7 per cent. dividend, and as there are no debentures or bank loans they are the first charge on profits. Behind the £812,500 of preference capital is over .000.000 of ordinary, and if one turns to the balance- sheet there is a surplus of liquid assets (including £400,000 in cash and gilt-edged) of £1,384,538 over the current liabilities. On liquid assets alone, therefore, without taking into account fixed assets standing in the books at another £590,000, the preference capital is covered by a substantial margin. How about dividends? Here the position is less pleasing, but if one takes the average earnings over the past eight years, in all of which the preference payment has been paid, the preference dividend has been just covered.
Last year, as everybody knows, was a bad year for textile warehousemen and manufacturers, and Cook, Son and Co.'s profits fell from £67,587 to £47,05s. In consequence, the board postponed payment of the half-year's dividend on the preference shares due on September 30th last. At the annual meeting, however, better news has been forthcoming in that on March 31st the board is proposing to pay not merely the normal half-year's dividend but the half-year's postponed payment, making a full 7 per cent. in all, and bringing payments up to date. Since last autumn, it appears, sales have shown a definite improvement, and the board is viewing the current year's prospects much more hopefully. The preference shares are now quoted at 14s., which includes the right to the 7 per cent. dividend at the end of next month. The yield is thus a full to per cent. on the money. The shares are obviously speculative, but they seem to me to be worth more than their present price. CUSTOS.
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