COMPANY NOTES
By CUSTOS ONCE again the gilt-edged market has been disappointed by the Bank • • of England which refuses to lower the Bank rate from 5 per cent. to 4+ per cent., although the Treasury bill rate remains under 3* per cent. The industrial share market has not been unaffected by this gilt-edged back- sliding. After its recent sharp advance prices fell away this week. A pause is very necessary to con- solidate gains and absorb the new issues. The rise in the ROLLS-ROYCE profit with an increase in the. dividend from 171 per cent. to 20 per cent. was followed by a 'rights' issue of two-for-seven at 95s. and after an initial fall the shares have been strong at I 27s. 6d. to yield 3.4 per cent. A `rights' issue is expected shortly from BRISTOL AEROPLANE for the purpose of funding its large bank over- draft. This also should be well received. Oil shares have 'boiled over' except for SHELL TRINIDAD, which rose Its. on the 200 per cent. scrip bonus. The coming development of Milford Haven as an oil port, to which the Prime Minister drew sharp attention (for political not Stock Exchange pur- poses!), caused a rise of 7s. in MILFORD DOCKS to 78s. 6d. Among industrial reports some dis- appointment was caused by the unchanged divi- dend of J. AND P. COATS in spite of higher profits (this must be the dullest equity share quoted on the Stock Exchange!) and by the per cent. cut to 9 per cent. in the dividend of CITY OF LONDON REAL PROPERTY, which fell 2s. 3d. to 34s. 9d. (to yield 5.1 per cent.). The explanation of this cut is that substantial expenditure on uncompleted new offices last year was unremunerative, but, of course, it will be fully remunerative next year and the dividend should be restored to 9+ per cent. or 10 per cent. This is the leading office real estate business in the City and as an inflation hedge the shares would, I think, be worth buying on any further fall.
* * * MARKS AND SPENCER, one of my New Year recommendations, has fulfilled all my hopes with a final dividend of 20 per cent., making the equivalent of 30 per cent. on thd doubled capital against 25 per cent. At 50s. the 'A' shares now yield barely 3 per cent. and many shareholders will be wondering whether to take their profit and depart. On the short-term 1 think such action might pay off. Last year the company increased its turnover by 6 per cent., its net profit by 13 per cent. and its profits before tax by 27 per cent. Thus it widened its trading profit margins very considerably and in these respects did much better than WOOLWORTHS. But can it repeat such an excellent performance this year'? I would doubt it. if the investor is wanting a high yield on a dif- ferent sort of store which did not enj9y the M. and S. prosperity last year, he might dmsider TIMES FURNISHING at 14s. 9d. to yield 6.55 per cent. This company's furniture business suffered from the hire-purchase restrictions but is now beginning to pick up and its tailoring business is flourishing. The management is first-class.
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