FINANCE AND INVESTMENT
By CUSTOS
AGAINST the background of good war news markets are surprisingly subdued. Most brokers are handling a fair volume of orders, but there is no runaway rise in prices, which is all to the good. One cannot help wondering, however, why such upward movements as have shown signs of developing in some of the speculative groups have lacked follow-through. My own feeling is that prices have in many instances reached levels at which the early possibilities in the way of dividends are pretty liberally discounted. There is another handicap on business—the difficulty of getting shares without forcing quotations sharply upward. This situation is restricting turnover in the " recovery group " of shares, buyers finding little or no stock on offer.
WOOLWORTH RESULTS
Nobody should be surprised at the further fall in F. W. Wool- worth's profits. The actual fail last year from £6,404,759 to £5,699,822 is fairly heavy, but not more so than one would expect in view of the drastic curtailment of supplies. From the dividend standpoint, the fall in the tax charge from £3,557,206 to £3,295,836 acts as a cushion, the ordinary distribution being cut by only 5 per cent. to 5o per cent. Assuming, as one ought, that the transfers to freehold and leasehold building reserve and staff pension funds, amounting together to £350,000, are charges against profits, it seems that the 5o per cent. rate was just covered. This year may well witness a further contraction of turnover and profits, but I do not advise selling the 5s. units. At 57s. 6d. they yield only 41 per cent., but the post-war recovery prospects are good.
IMPS " DIVIDEND
In contrast with the setback in Woolworth's earnings, the latest figures of the Imperial Tobacco combine show a remarkable stability. With a final of 71 per cent. and a 21 per cent. cash bonus, both free of tax, the board is maintaining the 171 per cent. tax-free rate for the year to October 31st, 1942. As general reserve again receives £5oo,000 and the carry-forward is £1,701,00o against £1,666,436 brought in, it appears that profits were practically 'he same as in the preceding year. Everybody must realise that the published profits of this undertaking do not tell the whole story, and I imagine that the .real position is considerably stronger than what is disclosed. As for the outlook, that depends on the availability of supplies rather than demand. All the evidence points to an increase rather than a falling-off in the smoking habit in spite of the rise in selling prices, and so far the Government has been willing to place tobacco high up in its list of priorities in allocating shipping space. At L7-1 " Imps" Li ordinary units are still good value for money to yield 41 per cent. less tax.
Previous page
