COMPANY MEETING

VICKERS LIMITED

IMPORTANT NATIONAL WORK

THE seventy-second annual general meeting of Vickers Limited was held at the Hotel Victoria, London, on April 3rd.

Mr. A. A. Jamieson, the chairman, in the course of his address to the stockholders, said: In the balance-sheet of \Tickers Limited I wish to call your attention to the substantial increase in the holding of cash and British Government securities. It is neces- sary to remember that this company provides finance as and when required by the operating companies, and, since the scale on which they operate is large, it is necessary for their success that the parent company should be plentifully supplied with cash. The total of cash and British Government securities is £6,000,000.

The assets of the aviation companies were sold to Vickers- Armstrongs in order to meet the wish of the Government that the whole technical and commercial management of Vickers- Armstrongs should be available for the increased production required from our aircraft plant.

The profit and loss account shows that the profit has increased by £47,797, and, after an allocation of £too,000 to contingencies and a transfer of £35o,000 to reserve, the carry forward is increased by £84,226.

The trading profits of Vickers-Armstrongs show an increase of £789,130, and of that increase £361,000 was distributed in divi- dends, the balance being required for higher taxation and in- creased depreciation. Before leaving the Vickers-Armstrongs accounts, it may be illuminating if I point out that that company, eleven years after incorporation, is still in arrears in the payment of dividend on its " B " cumulative preference shares.

No doubt the stockholders will have noted that an interim divi- dend was declared in October. This is the first interim dividend that has been paid by this company for nineteen years, and this fact indicates the difficulties involved in declaring interim divi- dends in a business such as ours. It is, however, the intention of the directors to pay interim dividends so long as practicable.

VICKERS-ARMSTRONGS LIMITED

The calls made upon our energies by the Service Departments have had a natural reaction on our commercial business, and ren- dered its retention a matter of some difficulty. At the beginning of 1939 we had under construction at Barrow two aircraft carriers and six submarines for the Royal Navy, as well as two destroyers for the Brazilian Navy. During this year we have received orders at Barrow for a cruiser for the Royal Navy and two destroyers and four submarines for the Turkish Government.

Work in hand at the Naval Yard, Newcastle, includes a Tribal Class destroyer, a battleship, an aircraft carrier and a cruiser. Since the beginning of this year orders received comprise a further battleship, a cruiser and two destroyers.

The exttnsion to the fitting-out wharf at Barrow has been com- pleted. It is equipped to fit out three large liners or aircraft carriers simultaneously, and is, therefore, in a much better position to deal with the fitting out of large ships than it has been in the past.

The main products of the Elswick Works have, of course, been those required by the Service Departments, and production has been in every way satisfactory.

The Southern Works, comprising Crayford, Dartford and The Thames Ammunition Works, were fully employed during 1938, chiefly on work in connection with the Defence programme.

ENGLISH STEEL CORPORATION LIMITED

The large volume of work on hand at the beginning of the year .-nabled the principal departments of the corporation to be kept in full employment throughout the twelve months. There are signs of improvement in the steel industry, and it would seem that 1939 should be a successful year for the corporation.

The Metropolitan Cammell Carriage and Wagon Company had a successful year. The profits, after providing for depreciation, Income Tax and National Defence Contribution, have risen from £222,924 in 1937 to £346,056. A dividend of 8 per cent. has been paid on the ordinary shares.

FACTORS AFFECTING PROFITS You know that our whole group is occupied as fully as the supply of skilled labour will permit : and it would be reasonable to suppose that increased turnover should lead to increased gross profits. However, my object in drawing attention to factors which affect the profits of the past and the current year is to remind you of new influences which tend to prevent an increase in gross profits being translated into a corresponding increase in net profits— such as extra taxation, the cost of A.R.P., and staff pensions and holidays with pay—as well as the extra depreciation required when cur plant is being used to the full extent of its capacity.

Under present conditions armament manufacture must absorb the largest share of our energies, and it follows that commercial work must receive less attention. We can, however, assure you that we are not unmindful of the time when we shall have to rely in greater measure on commercial work, and we are taking such steps as are possible to secure our position.

The report and accounts were unanimously adopted and the final dividend of 6 per cent. was approved.