£15m. to Find
Page 22
If you've noticed an error in this article please click here to report it so we can fix it.
THE sale of B.R.S. (Parcels), Ltd., to private enterprise is of political and practical importance to the road transport industry. If the parcels network remains in the hands of the British Transport Commission, the State haulage fleet will be disproportionately large and the guarantee of free competition in road transport which the Transport Act, 1953, purported to give, will be vitiated.
Whether a buyer can be found, particularly at a time when credit is strictly limited, is a matter of speculation. The greatest deterrent to investors is the large amount of extra capital—at least £8m.— needed to operate the business successfully. The directors admit that the working capital is insufficient and big sums, which the buyer of the company will have to repay, have been borrowed from the Commission.
The company's re-equipment needs, immediate and impending, total £8.35m., compared with working capital of £7m. The purchaser would probably have to raise at least £15m. to embark confidently on the venture.
The railway strike may have inflated the profit (£462,232) in the half-year to June 30 last, but the directors believe that, in the absence of unforeseen circumstances, that rate should at least be maintained in the second six months. The ratio of about 13 per cent, between annual profit and capital is, however, unrealistic, having regard to the company's woefully inadequate resources.
One of the unvalued assets is the exclusive right to the name, "Carter Paterson." Before the war, this stood for a great deal, but its goodwill value is probably now reduced. Much greater importance attaches to the five-year special A licences that will accompany the 4,000 vehicles. These are indeed valuable and will confer on the company a substantial monopoly in the smalls field The purchaser will also be able to command the services of the highly experienced senior officers who have run the business for some time. Placed once again in a strictly commercial atmosphere, they should be able to give the organization new stimulus.
Whether, in present economic circumstances, investors can be found to place £15m. in an undertaking that would be an ideal subject for renationalization by any future government, is a big question. If it fails to find a buyer, the possibility of selling it as a series of regional companies should be considered.