A TEXTILE DEBENTURE
It is good to see Lancashire cotton spinners standing shoulder to shoulder and defending their hardly-won margins of profit. In the American section the Lancashire Cotton Corporation, whose preference and ordinary-shares have often been recom- mended in these notes, looks well placed to make a handsome profit this year. Both shares, and especially the ki ordinaries at 168., are worth putting away. In the Egyptian section, which has also demonstrated the effectiveness of co-operative action, the position of the Crosses and Winkworth combine is becoming interesting. There are bank loans to be paid off and a debit balance of £245,341 to be wiped out, but the company is now making money. Preservation of the current margin of profit will yield net earnings sufficient to cover full debenture interest and adequate depreciation of plant and machinery.
The combine is working to capedty and is fully booked until next January. It is also safesparded against possible losses from declines in raw material. prices by its policy of buying raw cotton only against actual yarn sales. In this way
is is -never left with stocks bought at high prices or with unsold yarn. produced from cotton bought 'higher up. The most attractive stock is the 6 per cent. Heaton debenture now quoted at 711 per £m° nominal. • Interest is Akarrears from Februiry, 1932, equivalein „to £224 net, so that a buyer is really paying less than £50 on the assumption that the arrears are satisfied in full. My own guess is that the arrears will be dealt with under a capital reorganisation scheme, but by the time this becomes maacticable the debentures should be won!1 their full par value.
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