MONEY MATTERS by Martin Younger
Page 76
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Leyland expansion: Light is still green
FROM out of the prevailing gloom and despondency overhanging stock markets has come a sparkling refresher. Squeeze or . freeze notwithstanding, the Leyland Motor Corporation is not, as some City folk feared, going back on, or delaying its £60 million planned expansion programme.
Indeed, Sir William Black, the chairman, stated after the recent annual meeting that part of this giant programme is the erection of new factories to make engines; the factories to be at Leyland, Coventry and Liverpool.
Earlier Sir William told shareholders: "An upsurge in demand must come and we are determined to be equipped to take advantage of it". About £16 million is already ear-marked for outlay during the current year. Because they operated to a large extent on borrowed money Sir William declared that the per cent cut in Bank Rate would be a help. About the near-term future, Sir William stated that the current year was not going to be easystreet, but there was a "reasonable expectation" that the dividend would be maintained at the 111 per cent level.
There was more encouraging news for the shareholders of Burnholme and Forder. In his latest annual review the chairman reports that as a result of actions which the directors have taken, losses by the Tubby and Corfield subsidiaries have been halted; indeed during the past three months "small profits have been earned". The adverse effects of the squeeze have narrowed margins, which will have some effect upon the year's results. But he was able to state that trading to date appears to be satisfactory, taking account of the circumstances. With the elimination of the Tubby and Corfield losses "I am hopeful that the final results will be greatly improved", he added.
Shock news for the shareholders of vehicle retailers Robert B. Massey. Following the omission of the interim dividend the total payment for the year 1966 is 10 per cent against 15 per cent previously. This comes out of net profits of £63,860 compared with £85,807 the year before.
There are signs "which we are entitled to interpret optimistically", comments the chairman of Greenwoods (St. Ives) in his latest annual review. Mr. Silrnan reports that turnover during the first quarter of the current year shows an increase compared with the same period a year ago.
So far as the group's road transport division is concerned, however, Mr. Silman looks for no substantial increase in profit until there is a general improvement in the country's economy. But he nevertheless expects that last year's level will be maintained. Jobs Tax will not be a burden, he adds.