MONEY MATTERS
Page 77
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Barr and Wallace Arnold Maintains Dividend
IN a recent reference to BARR AND WALLACE I ARNOLD TRUST, the Leeds-based coach and hotel proprietors, I mentioned that the market was expecting to see higher earnings and a raised dividend in respect of 1963. On the first count expectations were fulfilled; consolidated group pre-tax profits at 2304,635 compared with 2301,905 the previous year. But the dividend is no more than maintained at 121%.
As anticipated in my earlier note there had been quite a bit of buying interest in these shares in anticipation of the results, activity which pushed the .price of the 5s. Ordinary shares up to around 20s. News of the sameas-the-year-before dividend, however, plus the announcement that the directors were considering raising " 2300,000 additional capital by way of a Rights Issue ", the exact terms of the offer to be announced later, brought in sellers and the price reacted sharply to around 19s., with the " A " Ordinary shares a shade lower at around 15s. 6d. At their current level the Ordinary shares yield 31%, and I regard them as a good lock-up.
When he reported to shareholders on the results of the year ending December 31, 1962, the chairman of GEORGE EWER (Mr. J. H. Ewer) felt fairly confident of improved results for the year which ended last December and that the rate of dividend paid in respect of 1962 (27%) would be maintained on the capital as increased by the one-for-five rights issue.
In 1962 pre-tax profits improved to 2106,485 from 2105,519 the previous year. The acquisition of the T. H. Nice business, described by Mr. Ewer as "undoubtedly proving a 'profitable investment ”, should have helped profits substantially—they were available to the group for the first time during 1963. In addition to the operation of a fleet of Grey Green and other coaches the group has a substantial motor distribution division.' this is a growing section of the business. The results for 1963 are expected to be announced next month. There has been a little activity in these 1s. Ordinary shares recently at around 5s. 3d. At this price they yield about 51% on the latest dividend. The market regards them as a sound holding.
These are prosperous days for the BRITISH MOTOR CORPORATION. Shareholders have just received what can only be described as a splendid half-term report. Subject to audit, the directors state, the estimated surplus on trading for the first 28 weeks of the present financial year is about 213m.—or 26m. more than for the same period a year ago. Though the interim dividend is no more than maintained at 41d. per share (71%) a scrip issue on the bass of one share for every eight shares at present held is proposed "in order to maintain a closer relationship between the Issued Capital and the capital employed by the company ". And the proposed new shares will qualify for the interim dividend now recommended—a rare practice indeed.
There seems little doubt that this leading group is all set for a splendid year's trading. That the price of these 5s. Ordinary shares is currently at its 1964 peak of 18s. 64. clearly indicates what the market th*nks about them.
Martin Younger