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rMONEY MATTERS
Page 66
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Transport Development rides on
THE rise of fid. to 14s. 6d. in the price of TRANSPORT DE VELOPMENT GROUP Ordinary shares immediately following the 1965 results clearly indicates the degree of satisfaction with which the market received the figures. Pre-tax profit jumped to £4,918,000 from £3,793,000 the previous year, with net profit coming out at £3.617.000 against £2.175,000.
From these higher earnings the directors recommend a final dividend of 51%. This makes 131% for the year compared with the equivalent of 111% paid in respect of 1964. Shareholders have more or less come to expect an annual scrip issue. And they are not disappointed; the board proposes such an issue on the basis of one-for-ten.
The fact that the rate of growth during the second six months of the year was not quite up to the level of the first half seems to matter little when, even during the year's second half, growth was at a rate of about 23%.
The importance of sound management as an investment factor has been stressed (unnecessarily I hope) on many occasions in these notes. Here is a splendid example of top-class management. And I agree entirely with the commentator who suggested that the success of TDG is to a large extent because of this good management being injected into its many acquisitions.
What of the present year? With an election pending and a gloomy economic outlook, the background is hardly helpful. But the directors state that the year has started with trading at a similar level to that of the early part of 1965. Provided the trading climate is maintained they are confident that out of it all profits will continue to increase during the present year.
Shareholders—and the market—can, in my opinion, put their entire confidence in this board of management: it will certainly not be their fault if a further set of excellent figures are not produced at this time a year hence.
At their present price these 5s. Ordinary shares yield around 44% based on the latest dividend. I expect to see the basis of future scrip issues whittled down, but this quite apart. I rate the shares a first-class purchase to hold for growth.
Martin Younger