MONEY MATTERS
Page 83
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An Interesting Newcomer
XPECTATIONS are that the placing of 590,585 ILa ordinary shares of 48. each of PETERBOROUGH MOTORS at a price of 8s. 6d. per share will arouse a good deal of interest when dealings start in them on the Birmingham Stock Exchange next Wednesday. The parent company acts as a main Ford dealer with retail sales rights of cars, trucks, vans and so on; but there are two subsidiarys. One of these operates a fleet of haulage and furniture removal vehicles, whilst the other is engaged in the financing of selected hire-purchase transactions on behalf of the parent company. The three divisions of the group have been highly successful in recent years. For example, pre-tax combined profits jumped from £36,000 to 5152,000 during the past 10 years. The directors anticipate growth to continue; they make the forecast of pre-tax profits in respect of 1964/65 of "not less than £150,000 ". Birmingham sources, however, consider this to be a conservative estimate. Nevertheless, it would provide almost double cover for the 14% dividend. Birmingham stockbrokers firmly believe there will he a premium on the price when deals start, and that the only question is—how much? Current forecasts range between Is. 6d. and 2s. 6d. per share.
Meantime, there are items of good news from two companies already on the Stock Exchange. The chairman of WILLIAMS HUDSON, Mr. L. A. Simpson, told shareholders at the annual meeting that the results for the first three months of the present tratLug year were "very encouraging" and better than those for the same period a year ago. And the chairman of PROVINCIAL TRACTION CO. commented that results during the current year to date show progress to be continuing.
Although the announcement is a little way ahead yet market interest in the results for the year ending August 31, 1964, of PLAXTONS (SCARBOROUGH) is beginning to build up. In 1962 profits fell to 5177,887 from £368,923 in the previous 17 months. The credit squeeze was a major factor behind this setback. But it did not prevent the directors from raising the dividends to 171% from the 121% paid previously in respect of a period of 17 months. At the time this was interpreted by the market as boardroom confidence in the outlook. This was justified, because for the year ending August 31 last profits before tax made a welcome, if not as great as many had hoped, improvement to 1200,184. Out of these higher earnings the dividend was raised again, this time to 19%.
Has this progress continued? Reporting to shareholders almost a year ago, the chairman, Mr. F. W. Plaxton, commented that 'off season" work on the coachbuilding side of the business had helped to reduce overheads and should bring similar benefit in the current trading year. All in all I feel it is reasonable to anticipate a further advance in profits. At their present price of 18s. 6d. these Ss. ordinary shares yield a useful Si% based on the latest dividend covered well over twice. I consider they have attractions.
Martin Younger