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MONEY MATTERS

12th February 1965
Page 80
Page 80, 12th February 1965 — MONEY MATTERS
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Which of the following most accurately describes the problem?

Leyland Off to Good Start

TROM the point of view of work on band—the order I. books are described as substantial—the new financial year of LEYLAND MOTOR CORPORATION is off to a good start. But in his annual review the chairman, Sir William Black, strikes the cautionary note that profit margins are under pressure. Sir William is correct to mention this vital factor. Yet it will be surprising indeed if this virile, capable board fails to wholly or largely defeat this inroad into profitability.

Sir William emphasizes that a group the size of Leyland iS to a large extent dependent on the state of the economy of the world as a whole. At home and overseas, he comments, "general economic and political conditions affect us, but there is still great scope for a group such as ours ". Leyland is a prolific exporter and the board has set a target of an increase of £30 in. in shipments during the current trading year. I entirely agree with the long-term view of a broker friend who on more than one occasion has said to me: "These shares should be bought, locked in the safe and the key thrown away."

In a circular letter to shareholders in connection with the proposed take-over of Hanson Haulage the chairman of TAYFORTH forecasts that pre-tax profits of the Tayforth group, as currently constituted, will be "materially higher" than those for the previous year. The forecast of a final dividend of 11% (payable on a capital made larger by the shares to be issued re the Hanson purchase) is made. This would bring the total to 181% for the year to end on March 27 next, or 34% more than was paid the year before.

THE GOOD RESULTS Here are two good results. WALTER WRAGG, motor vehicle distributors, agents and dealers, reports that for the year ended October 31 last net profit soared to £16,913 from £3,505 the previous year. Out of these higher earnings the directors recomrnend a dividend of 15%. This compares with a forecast of not less than 10%. At their present price of 4s. 11d. these 2s. Ordinary shares yield an aboveaverage 71% based on the latest dividend. They look reasonably valued to me.

AMALGAMATED GARAGE HOLDINGS came to the Stock Exchange last August. This company now reports that for the year ended September 30 last net profit was £49,708 compared with £38,855 the year before. A final dividend of 71% is proposed (as forecast) to make the year's total 15%.

In answer to a reader's query, although a jobber is said to " make " a price, it is the substantial stream of business that flows to the Stock Exchange, via brokers, that determines the level of prices. This business comes from investors large and small, private and institutional, and from every part of the world.

Martin Younger


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