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MONEY MATTERS
Page 126
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Kenning in line with trend
IF additional proof were needed of the adverse effects upon the
profits of retailers of private and commercial vehicles of the present harsh squeeze surely the latest results announced by the Kenning Motor Group will supply it. Group pre-tax profits for the year that terminated on June 30 amounted to £1,827,984. The total in respect of the previous year was £2,187,772. Nevertheless, taking the year as a whole the 161 per cent down-turn is better than was the position at the half-way-stage when the drop in pre-tax profits was of the order of 21 per cent.
The directors state that the year's figures were struck after deducting charges amounting to £1.2 million (against £1.0 million previously). Depreciation increased to £523,374 from £482,525 the year before. This fact and the higher interest charges may well have accounted for a major portion of the setback in profits.
The chairman's comments about prospects which he may care to make in his annual review are awaited with even greater-thanusual interest. At around their present price of 9s. 6d. (fractionally above their 1966 "low" point) these 5s. Ordinary shares yield 7 per cent based on the latest payment. While the position must remain uncertain in view of the dark clouds overhanging the motor industry, the current share valuation would seem to just about take care of the known difficulties. The price could go lower in the present state of markets, but I would say to a present holder"stick to them".
Hammered by rising costs and labour troubles the pre-tax profits of Rover Company for the year that terminated on July 31 slumped to £3 million from, £3.6 million in respect of the previous year. Nevertheless, the proposed final dividend of 7d. per share maintains the year's total at 9d. per share, a payment that is covered about if times by earnings. Land-Rover sales were among those hit by the squeeze. But overall group exports improved to 50 per cent from around 30 per cent and may well expand further. A fall of 6d. to 11s. 1-id. in the price of these shares greeted the announcement. In view of the gloom overhanging industry generally the current valuation of the shares would seem about right.
Martin Younger