MONEY MATTERS by Martin Younger
Page 68
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The Plaxtons picture looks most encouraging
stated in these notes recently, Plaxtons (Scarborough) achieved a new record in profits during the year that terminated on August 31. The chairman's annual review is now to hand; and a most encouraging doettment it turns out to be.
This firm of coachbuilders, contractors and box and case makers —note the balance of diversification—has now entered upon its third year since the shares .came to the Stock Exchange. And one deduces from the tone of chairman Mr. F. W. Plaxton's comments that it is going to be another good 'un. Costs are rising, but despite this inhibition Mr. Plaxton regards the outlook as being good enough to forecast a maintained 221 per cent dividend.
The group's new models were well received at the Commercial Motor Show. And the order book is stated to be large enough to ensure a satisfactory production potential. A new development department, costing an initial £.20,000, has been set up to deal with problems arising from a growing export business potential. There have been some delays arising from slow delivery of components, but this capable board can be relied upon to find the answer to that one.
At their present price of 22s. these 5s. Ordinary shares yield the currently below-average 5i per cent based on the latest dividend, a dividend incidentally that enjoyed the above-average-cover of 2.4 times. I agree absolutely with all those in the City who regard these shares as highly attractive for the longer term.
The shareholders of Seddon Diesel Vehicles (annual review to hand) can look forward to another satisfactory year. The order book is stated to be full, ensuring capacity working for some way ahead. Pennine Coachcraft—a subsidiary producing bus bodies— is expanding at a fast rate. On the other side of the coin, however, Halls (Finchley) is not doing so well on the car side. But there is little doubt that matching the credits with the debits of the Seddon Diesel picture there is much about which to be optimistic. This is one company at least that looks all set to ride-out the squeeze/freeze without too many bruises. In fact my assessment is that at their present price of 5s. 44-d. these 2s. Ordinary shares (yielding 4+ per cent) could, with future advantage, be slotted into the next opening to Plaxton's in a growth portfolio.