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MONEY MATTERS
Page 118
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Tayforth Expands
DROV1DED shareholders give their approval (and it seems hardly likely that they won't) the acquisition by TAYFORTH of all the share capital of Hanson Haulage will become an accomplished fact. This important addition to the Tayforth Group is fully in line with the board's declared policy. As recently as last Jitly the chairman stated clearly that the directors were constantly looking for "opportunities for expanding the group by acquisition of businesses which will further develop our road transport interests". The shares of Hanson Haulage are controlled by the Hanson family and are not quoted on a Stock Exchange. The company was formed originally in 1854; today it is one of the country's leading parcels' haulage companies. The directors of Hanson estimate that the consolidated profits, pre-tax, for the year ended December 31 last are about 1200,000. In the absence of unforeseen circumstances they estimate that consolidated pre-tax profits in respect of the current trading year will show a further increase. Clearly, then, this is an acquisition of some magnitude and importance to Tayforth. The deal will require the issue of 1,740,740 Ordinary shares of 5s, each of Tayforth, plus £400,000 in cash.
In his last annual review the chairman of Tayforth was hopeful that there would be "improved results for the current year." Last November, at the time of the interim dividend, the expectancy remained the same. Further details will be awaited with great interest. Meantime, Tayforth 5s. Ordinary shares at their current price of 14s. 6d. yield a useful 514% based on the latest full year's dividend of 15%. In my opinion they should be held.
There was good news for the shareholders of P. J. EVANS, commercial vehicle and car dealers of Birmingham. Group trading profits for the year ending September 30 last jumped to f127,685 from 1117,120 the previous year. Out of these higher earnings the directors recommend a final dividend of 114%. This makes the year's total 16% and compares with the equivalent of 15% in respect of the previous year. Steps have been taken, the board announces, to have the group's properties professionally valued as at September 30 last. A surplus of market value over book values of 186,510 has been placed in the capital reserve account.
Can shareholders look forward to a scrip issue? Birmingham broker friends tell me that they see no signs of such a move at present, it being pointed out that it is becoming more and more the practice for boards to make such an announcement at the time of issuing an interim statement or reporting the year's results. Currently these 2s. Ordinary Stock units (quoted on the Birmingham Stock Exchange) are a steady market around 6s. 41d.
Martin Younger