Dividend Cut

27th May 1966, Page 138

27th May 1966

Page 138

Page 138, 27th May 1966 — Dividend Cut

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Keywords : Dividends, Dividend, Financial Ratios, Taxation, Dividend Yield, Business, Public Economics, Dividend Tax, Business / Finance

THERE is unpleasant news for the shareholders of PROVINCIAL TRACTION. The directors propose a final dividend of 6% in respect of 1965. This makes the total for the year 91%, or 3% less than was paid in respect of 1964. Group pre-tax profits fell to £36,297 from £84,636. This balance was struck after allowing for a much heavier depreciation charge-£71,348 compared with £47,700. The price of these shares was easier at around 4s. 6d.-down 3d.following the news.

SOUTHDOWN MOTOR SERVICES also had a less satisfactory experience last year than in 1964. Net profits fell to £301,016 from £353,942 the year before. The proposed final dividend of 54% makes the year's total 9% less tax. This compares with a distribution of 51% free of tax the previous year. The price of these shares eased 6d. to 24s. 9d. on the announcement.

It is pointed out by the directors that because of unavoidable delay in obtaining higher revenue to meet increased costs and a continued dwindling in the number of passengers carried, pre-tax profits fell by £99,469. Higher costs necessitated applications to increase fares; in the general area served by the company these were approved, starting at the end of last June. In the Portsmouth and Brighton areas they did not come into effect until December 5 and February 13 respectively.

GEORGE EWER did better in 1965 than in 1964, with the group pre-tax profits amounting to £187,659 compared with £175,763 the previous year. Out of these increased earnings the board recommends a final dividend of 6% to make the total for the year that ended on January I last 16%. This compares with a total of 15%-54-% interim payment on smaller capital. At their present price of 4s. these 2s. Ordinary shares yield a useful 8% based on the latest dividend. In my opinion should be retained.

Although the profit for the first three months of the current trading year should be better than that for the same period the previous year, Mr. I. Appleyard, chairman of the APPLEYARD GROUP, states that these encouraging results should be interpreted "with caution". Meantime, the price of these 5s. Ordinary shares at I Is. yield 64%

based on the latest 15% dividend. Martin Younger

Dividend Cut

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