£800,000 fleet investment pays off for United Transport
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IT looks to be a near certainty that the results of United Transport Company for 1966 will exceed, and by a substantial margin, those for the previous year. This leading company has just reported that pre-tax profits for the first nine months jumped to £2,676,000 from £2,375,000 in respect of the same period the previous year; rightly described by the directors as a "satisfactory increase".
Matched against the fact of the road haulage industry's difficulties in getting their charges more economically equated with the ever-rising costs, there seems little doubt that these "satisfactory" results stem largely from the £800,000 plus investment which the group made in the replacement of its fleet a year ago.
Larger capacity vehicles were acquired and their tender age must have cut down maintenance costs quite considerably.
The latest statement adds that the contributions of the United Kingdom company was at a higher level. The group has a strong stake—via Duramin Engineering—in the growing field of containerization.
Trading since the end of September has continued to be satisfactory the statement adds. A firmer market following the latest news these 5s. Ordinary shares yield slightly less than 5 per cent at their present price of around 15s. 3d. If this return seems meagre, it is worth remembering that a maintained 15 per cent dividend looks set to be covered about three times by earnings, making an increase in the distribution a distinct possibility once the Government lifts its embargo.
The pre-tax profit of Atkinson Lorries (holdings) for the six months that terminated on September 30 amounted to £158,000. The total for the full year to end-March 1966 was £367,000. No interim dividend is being paid; there was a half-time payment a year ago solely for tax reasons.
Sales remain good and the order books are sound. But the chairman, Mr. A. W. Allen, warns that margins are under pressure; he describes the outcome for the full year as "uncertain" because of the prevailing economic restrictions. The 15 per cent dividend is in no danger—earnings should be at least twice— but it does look as though the current price of these shares (6s. Ifd.) to give a yield of 44 per cent indicates hopes for a speedy regrowth on the lines of recent years.