MONEY MATTERS
Page 85
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Dunlop Rubber Prosper
THOSE investors who bought DUNLOP RUBBER 1 (Ordinary Stock ahead of the announcement of the results must feel highly pleased with themselves. The market had expected excellent figures for 1963; excellent indeed they are. Sales jumped to £283m.—a rise of £14m. —resulting in a net profit of £7.29m. compared with £5.70m. the previous year. Out of these higher earnings stockholders are to receive direct benefit by way of a final dividend of Is. 3d. per 10s. Ordinary Stock unit, making a total of Is. 10d. for the year against Is. 7d. paid for 1962. In addition the board proposes to make a scrip issue on the basis of one for three to those stockholders on the register as at April 3.
The question which the market is now pondering is not whether the dividend will be maintained on the proposed larger capital a year hence, but the prospects of a further increase. So far as the tyre division is concerned the motor trade is going full tilt and likely to continue doing so, which means active days for Dunlops. Added to this is a growing division making consumer goods; this, too, is expected to remain prosperous during 1964. The chairman's full review is, as always, awaited with keen interest. Meanwhile, it is safe to say that the latest results fully merit a current price of 40s. 3d.— a 1964 peak—for these 10s. stock units. When Dunlop cut its dividend some little time ago it dropped out of the blue chip list, It has now, surely, regained this status.
The previously reported arrangements for the issues of capital by the AMEY GROUP to fund bank indebtedness and to provide additional working capital for the group are now complete, the board states. On offer to Ordinary shareholders are 911,454 Ordinary shares of 5s. each in the proportion of one new share for every four Ordinary shares held at March 31 this year, for subscription at 24s. per share. In addition, /600,000 64 per cent Debenture Stock 1984-89, to be placed by Kleinwort. Benson Ltd., has been created. The audit of the accounts for the year which ended on December 31 last is not yet completed, but it is now apparent that the pre-tax group profit for the year will be in the order of £350,000 as compared with a figure "in excess of £300,000" mentioned in the statement put out on March 18 this year.
BIRMINGHAM AND MIDLAND MOTOR OMNIBUS CO. LTD. recommends a final dividend of 6% to make an unchanged total of 10% for the year 1963. Group net profit, however, came out at £906,028 compared with £685,968 the previous year. The fact that the tax charge is down to 1169,612 from £323,750 in 1962 is because of statutory allowances on new vehicles, Half of the equity capital of Birmingham and Midland is owned by Birmingham and District Investment Trust (which is in the British Electric Traction Group) and the other half by Transport Holding Co.
Martin Younger