Financial Notes

CHEERFUL MARKETS.

THE moderate setback of a week ago in Stock Exchange securities has proved to be short lived. Once again such factors as cheap money and improving trade have proved greater than apprehensions in regard to international politics, and prices especially of industrial shares and the more specu- lative descriptions have further advanced during the week. Among the outstanding features has been a further sharp rise in the shares of Woolworths, while among shipping shares P. and 0. have further advanced on the resumption of dividends on the Deferred stock. A continuance of the rise in prices of commodities has also been an outstanding feature of the week.

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BRITISH OVERSEAS BANK.

Even after making allowance for the fact of the absorption during the year of the business of Frederick Huth and Co., the latest figures of the British Overseas Bank covering the year to October 31st last indicate a general expansion in business, though at present profit and loss figures have not been materially affected by the greater activity of business. The movements are on the right side, the profits showing an increase of just over £2,000 while the deposits at £3,983,000 show an increase of about £1,300,000. The advances to customers also show an increase from £1,782,860 to £1,956,870.

* * * * IRON AND STEEL PROSPERITY.

Further indication of the recovery in the Iron and Steel industries is afforded by the latest report of Dorman Long and Co., whose trading profits for the past year show a rise of £200,000 at £989,787 ; moreover, there is also an expansion in the income from subsidiaries, and the actual profit balance for the year is £1,114,000 against £825,000 for the previous year. The depreciation allowance is increased from £205,731 to £250,000. A sum of £113,235 is transferred to Reserve against £200,000 last year, but the Reserve is also increased by the transfer of a surplus arising from realisation of certain investments and with the addition of the premium on the prior lien stocks issue, the fund amounts to £574,131. For the first time for many years a dividend—the substantial one of 0 per cent.—is declared on the Ordinary shares, leaving £148,967 to be carried forward.

* * * A.B.C. PROFITS.

The latest report of the Aerated Bread Company shows that for the year ended October 3rd last the profits increased from £221,255 to £232,333. The amount allowed for depre- ciation for the year was £73,120 against £65,330. The company's General Reserve of £110,000 has been transferred to Reserve for Obsolescence on reconstruction of the factory, and if the money is fully required for that purpose the com- pany is left without any reserves except the £25,000 now set aside. At the same time, the total of cash is much higher at £79,755 against £31,738 a year ago.

* * * * A PROSPEROUS UNDERTAKING.

The latest Report of Crompton Parkinson, Ltd., the electrical manufacturers, shows a further marked expansion in profits, which revealed an increase for the year of £110,000, with profits at the new high record of £353,858. A year ago the capital was doubled by a share for share bonus issue in addition to the 7 per cent. capital bonus distributed with the dividend, but in spite of the increase in capital, the dividend rate at 12} per cent. is maintained and a further capital bonus of 7 per cent. is announced. The transfer to General Reserve is £224,963 against £154,877 and as the share bonus necessitates the capitalisation of only £34,963, the Reserve Fund will actually be increased by £190,000 to a total of £500,000. Moreover, to meet capital expenditure for expansion without reducing the Company's liquid resources, shareholders are to be offered one new "A" share at 30s. per share for every 10 Ordinary or "A" Ordinary shares held. As at the time of the announcement the shares were quoted at about 80s., the offer constitutes a further substantial bonus.

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Financial Notes

(Continued from page 1020.) BANKING IN CANADA.

The preliminary cabled figures of the Annual Statement of the Bank of Montreal made up to October 31st reflect the expansion which is now taking place in business in Canada, that is, so far as deposits are concerned, the total increasing from $676,000,000 to $691,000,000. Loans, however, have declined and the bank's increased resources have gone into investments, principally Dominion and Provincial Govern- ment Bonds, which total $442,000,000 compared with $361,000,000 a year ago. It looks as if the moderate con- traction in Loans might be due to the fact that the very large businesses are holding large resources with which to finance new business. So far as the liquidity of the position is concerned the balance-sheet makes a stronger showing than ever, the total assets at $805,000,000 against $792,000,000 a year ago including liquid assets of $606,000,000 or 83 per cent. of the liabilities to the public. There was a moderate increase in profits and the dividend of 8 per cent. is paid after $200,000 has been written off Premises, while the carry forward is increased by $101,000.

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A PLEA FOR UNIT TRUSTS.

Addressing the Incorporated Accountants' Society of Liverpool last week on the subject of the change in investment fashions, Mr. Hartley Withers, the well-known financial writer and economist, and director of Allied Investors Fixed Trust, Ltd., said that among the many revolutions that had happened since the War, the change in the sentiment of the average investor was one of the most important in its financial and social effects. Recalling the period when the investor was disposed to narrow his selection of investments to Government and kindred securities, Mr. Withers referred to the collapse in Government stocks during and following the War accompanied by a considerable rise in ordinary shares of those industries which had benefited by the conflict. The preference for equities which has been noticeable since the War carried with it, Mr. Withers considered, some dangers unless risks were well spread and this, he maintained, was specially provided for by the Unit Trust movement.

* * * .* A PROSPEROUS INDUSTRIAL.

The United Molasses Company have experienced a remark- ably good financial year and the final dividend of 10 per cent., making 14 per cent. for the year, against 8 per cent., is a remarkable showing. The trading profits were £789,000, against £718,000, while the net profits were £485,000, against £421,000. Substantial allocations are made to special funds, including £80,000 to the General Reserve, and even after paying the higher dividend the carry forward of £49,480 is rather higher than a year ago.

▪ * * * MOTOR TRADE AcrivITT.

The activity and prosperity of the motor industry is reflected in many directions. Thus, for example, the profits of Bowmaker, Limited, who finance hire-purchase sales, mainly of motor vehicles, increased during' tlieir last financial year from £92,795 to £123,521; the rise in profits was probably assisted by the larger amount of capital in the possession of the Company by reason of the issue made early in the present year. The Ordinary dividend is at 10 per cent., against 9 per cent., while a sum of over £19,000 is added to the General Reserve.

Then, again, I find that Stewart and Ardern, Limited, the Morris car distributors, also report a small increase in profits at £65,803, while the- dividend on the Ordinary Shares is 17i per cent., and the participation of the Preference Shares at the rate of 1 per cent. makes a total payment on those shares of 61-per cent. _per ..annum.

Finally, it may be noted that Dennis Brothers, Limited, the Guildford commercial motor manufacturers, announce profits for the past year of £134,187, as compared with £119,882 for the previous year. In this case the Company's issued capital amounts to only £75,123 15s., all in is. Ordinary Shares, which now receive a dividend of 1661 per cent., com- pared with 150 per cent. for the previous year, when, however, there was also distributed a special bonus of 50 per cent. from capital profits. The capital has been twice reduced by cash repayments without affecting the Company's earning capacity, and the Is. shares now have a market price of