The cinema industry got little more than half the relief
of tax it wanted from the Chancellor, but a E61 million saving is not to be despised. About LI 1 million goes to bring the film produc- tion fund up to £31 million and the balance to help cinema revenues depleted by rising costs and a still falling box office. (Admissions were 7 per cent. down last year : 185 cinemas closed down, representing 3 per cent. of . the total seating capacity.) The RANK ORGANISATION, being the largest group in both exhibition and production, Will benefit most. Assuming no reduction in seat prices, about £11 million of the tax saved will go to Odeon and Gaumont-British. This will add nearly 50 per cent. to their net theatre profits on the basis of last year's figures. About 20 films a year are produced in the Rank Studios and last year nearly £1 million was earned on production and distribution account. This will now be increased by the extra amount going to the film production fund. Altogether the prospect is much improved for Rank Organisation 5s. shares at 8s. 9d. to Yield 7.05 per cent. on the 121 per cent. dividend covered 5.6 times. Also for the subsidiary CAUMONT-BRITISH, which gathers in the profits of the now prosperous Rank Precision Industries. The 5s. `A' shares at 5s. yield 14.6 per cent. on the 15 per cent. dividend covered 1.3 times. ASSOCIATED BRITISH PICTURE is weaker than Rank on its production side, but if its interest in tele- vision begins to pay dividends the outlook will be very much improved. Before leaving cinema shares I would mention that a year or more ago advised investors to sell TECHNICOLOR 5s. shares, .en standing at about 18s., on the grounds that they had lost their virtual monopoly in colour Printing and were meeting with increasing com- Petition from other printing laboratories. The shares are now Ts. 6d.
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