MONEY MATTERS
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Another Divide crease for Lep
DURING each of the past four years LEP GROUP has increased its dividends; for the year ending December 31, 1958, 12-5 per cent was paid, whereas for 1962 the distribution was 18-5 per cent. And this was done despite a couple of setbacks to profit, in 1962 and the previous year. The results for 1963 of this international group are expected at the end of August or early September.
The question being asked in the market is whether the dividend will again be lifted. Lep Group expanded at a commendable rate up to 1960; that year pre-tax profits jumped to £627,252 from £513,587 the year before. In 1961, however, they dipped sharply to £585,459 and fell still further to £579,444 in 1962. In his report covering 1962 the chairman, Mr. Richard Leeper, commented that 1963 had made a poor start because of the bad winter. The rest of the year, however, should have been favourable to trading. In 1962, £600,000 was expended on fixed assets—for example, two new packing and road transport depots were opened in London. Also some additional road transport services were started.
Because political uncertainties continue to dominate the group's Middle East interests they were sold, and on satisfactory terms. These developments, superimposed on the brighter world economic climate in general and in the U.K. in particular, should have helped Lep; and a further raising of the dividend would certainly surprise the market. At their present pr:ce of 155s., these 20s.
shares are more than 20s. dearer than they were a year ago—a reflection of the hopes of what is in store when the forthcoming results are made known.
It is nearly a year now since the 2s. ordinary shares of HANGER MOTORS (BIRMINGHAM) were introduced WO the London and Birmingham Stock Exchanges. The pre-tax profits of this Birmingham-based dealer in Ford commercial vehicles and cars doubled during the past five years. For the year ending June 30, 1963, they amounted to £210,000. For 1964 the forecast was for profits, before tax, of "approximately 2200,000 ". In addition to these ordinary shares there is in issue 1320,000 of 2s. deferred shares. These do not rank for dividend until 1968-69. But the group is expansionist-minded; suitable acquisitions are constantly being sought. All in all there should be no difficulty in producing earnings to provide a satisfactory rate of dividend on ' the larger capital. Meanwhile, the 2s. ordinary shares at their price of around 7s. yield a useful 41 per cent on the forecast dividend of 16 per cent. They are a sound bolding.
The board of GEORGE EWER propose to make a rights issue of 2s. ordinary shares at,3s. per share on the basis of one for four. This follows the recent scrip issue and the consolidation of the is. shares into shares of 2s. each.
• Martin Younger