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MONEY MATTERS P.M.T. Maintains Dividend

20th March 1964, Page 96
20th March 1964
Page 96
Page 96, 20th March 1964 — MONEY MATTERS P.M.T. Maintains Dividend
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TWOrdinary stock of POTTERIES MOTOR TRACON (in which British Electric Traction Company has a controlling interest) is quoted on the London and Birmingham Stock Exchanges. The company has just announced a modest increase in net profit for 1963£217,742 compared with 1201,789 the previous year. Tax, however, was 188,819 compared with £107,298 paid in respect of 1962. The proposed final dividend of 4% tax free maintains the year's distribution at 71% as paid in respect of 1962. The amount put to General Reserve this time has been stepped up to £150,000; a year ago the amount placed there was £100,000. The current price. of this Ordinary stock is around 34s. 6d. per £1 unit and there was business in it at 35s. in London recently.

NORTHERN GENERAL TRANSPORT is another company in which British Electric Traction (jointly with the British Transport Commission in this case) has a large stake. This company has a splendid dividendpaying record. For the years 1955 and 1956 the payment was 10%; it was raised to 11% in respect of 1957 and 12% in 1958-all less tax. •For each of the years 1959 to 962 inclusive, however, a tax-free 71% was paid. The market expected that for 1963 the previous year's payment would be maintained, expectations which have been fulfilled; the company has just announced a final dividend of 5% tax free to make 71% for the year. Profit attributable to the holding company is £461,638, compared with £446,875 a year ago. Another interesting set of results that are expected to he announced shortly are those of BARR AND WALLACE ARNOLD TRUST, the Leeds-based motor coach and garage group. For the year ending December 31, 1962, pre-tax profits jumped to £183,987 from £153,460 the previous year; this was the seventh year in succession that higher profits had been made. The dividend was held at 121% (covered approximately 21 times by earnings), hut as it was payable on a capital increased by 1-for-3 scrip issue it represented an effective increase of just over 3%. There has been consistent growth by this group during the past decade, and it is confidently expected that the process will he shown to have continued when the forthcoming announcement of the results is made. The market expects to see both higher earnings and a raising of the dividend. Meanwhile, the price of these 5s. Ordinary shares is quietly steady around 19s. 6d. But 1 look for renewed investorinterest in them as the time for the results to be made known approaches. The management is first-class and the group has built up an enviable reputation for the quality of its tours. Martin Younger c56

amount will be allowed for residual value. With an estimated mileage life of 200,000 the depreciation cost per mile then becomes 3.21d.

Total Running Cost

The total running cost is thus 1406d. per mile or £46 17s. 4d per week. Similarly the total operating cost is 20-61d. per mile or £68 14s. 5d. per week.

Fri contrast with the example given previously in this series when one tractive unit throughout was employed but with the alternatives of one, two or three semi-trailers, the alternative now will be either one unit and trailer or two units and three trailers, bearing in mind the higher cost of the boxvan trailer.

Dealing first with the two tractive units and two semitrailers (but no spare trailer) the standing cost per hour for the two would be 249.76d. with a running cost of 28-12d., i.e. double the calculations already explained.

Regarding any additional cost incurred when a third (i.e. spare) boxvan semi-trailer was employed an extra 10s. per week would be allowed for insurance. Interest charges on the initial outlay of 11,750 for this additional trailer amount to the equivalent of £1 15s. a week, giving a total additional standing cost of £.2 5s. per week or 12-86d. per hour.

Relative to running costs an addition of 0-45d. per mile is allowed in respect of maintenance even though the total mileage of the three trailers will not exceed that of the combined total of the two tractive units. This allowance is made, nevertheless, because washing and some servicing will still be required.

As already explained, some allowance will be made in this instance for obsolescence of the semi-trailers even though theoretically the rate of depreciation diminishes as the number of spare trailers increases. Allowing for half of the price of the additional semi-trailer to be written off as depreciation in this instance adds 0.86d. per mile in respect of this item, so giving a total additional running cost per mile of 1.31d. to be met when an additional semi-trailer is employed.

Adding the amount for the spare semi-trailer to the amount applicable when two tractive units and two trailers are used gives a standing cost per hour of 262.62d. and a running cost per mile of 29-43d. for the two units and three semi-trailers.

Applying the Results

Applying these results to a hypothetical day's work it will be assumed in the first instance that when one unit and trailer are employed a day's run involves a time of seven hours during which 60 miles are run and a full load (12 tons) of goods delivered on the outward journey only. The time cost would then be £3 12s. 10d. (seven hours at 124.88d.) and a mileage cost of £3 10s. 4c1. (60 miles at 14-06d.) giving a total of £7 3s. 2d. for the 12 tons carried, or 143.08d. per ton.

It will now be assumed that the availability of a spare trailer allows the overall journey time, including loading and unloading, to be reduced to five and a half hours, so permitting two trips per 11-hour day. With two units and three trailers employed the equivalent cost would be £26 15s. Id., made up of 11 hours at 262-62d. and 120 miles at 29-43d. With 48 tons moved the corresponding cost per ton would be 133-77d. If the previous tonnage rate is reckoned at a notional figure of 100 then the corresponding figure when two tractors and three trailers are employed would be 93.49, so providing a reduction of 6-51 per cent, even though the cost of the additional trailer has been reckoned at £1,750.

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People: Martin Younger
Locations: Leeds, London

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