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MONEY MATTERS

14th February 1964, Page 133
14th February 1964
Page 133
Page 133, 14th February 1964 — MONEY MATTERS
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Which of the following most accurately describes the problem?

Higher Payment by Lancashire United P

WILIEN the board of LANCASHIRE UNITED W TRANSPORT meets on March 20 will it increase the final dividend on the Ordinary Stock? This payment was 81% during each of the past four years; in September last the interim dividend was maintained at 4%. This company has a good record; earnings have increased during each of the past three years—there was a 100% capitalization issue in 1958.

Reporting to holders in April last the chairman, Sir Robert A. Cary, said that the Waterloo Motors (Bolton) subsidiary, acquired in 1960, had borne its share of the difficulties encountered by the motor trade generally during the year under review. The board was of the opinion, however, that it was then in a position to take full advantage of any upward trend that may show itself during the year ahead. The improved economic conditions since that time should have brought benefits. Sir Robert added that the group's coach operations had shown improvement during the year and they would be enhanced by certain local excursions and tours licences which had been transferred to the group from a small operator. Last year's 121% dividend was covered by earnings of 271%. These £1 Ordinary Stock units have been quietly changing hands at around 42s. 6d. recently. At this price they return a useful ES 17s. 8d. per cent on the latest dividend. At the date of the last balance sheet each Ordinary stock unit had a net asset value of around 46s. 6d. A moderate increase in the final payment would not take the market by surprise.

FODENS announced a proposal to raise about £422,000 by way of a "rights" issue of one £1 Ordinary share at 35s. for every six existing shares held. These new shares will rank for the full dividend in respect of the year ended March 28. And the directors expect this payment to be not less than the 121% paid in respect of 1962-63. The chairman, Mr. Albert Stubbs, reports that the company is extremely busy and that the current year's results should show considerable improvement on those for the previous year. As often happens when the equity capital is going to be increased, the price of the existing shares was depressed—they lost 3s. at 51s. 3d. When a revival of buying interest takes place in markets generally the price should quickly recover.

Despite the sluggish and generally easier trend by equities during the past week or so, WILKINSON'S TRANSPORT GROUP (favourably referred to in my notes a month ago) has gained ground on the Manchester Stock Exchange. Steady buying has lifted the price to around 16s. 6d. ex the recent scrip issue; this compares with an equivalent price of 14s. 71d. a month ago when they were " cum the scrip issue. Given more favourable market conditions 1 expect to see the upward movement continued.

Martin Younger


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