The L.G.O.C. Profit.
Page 17
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Extreme surprise has been caused, in many financial circles,. by the poor net results of the L.G.O.C. trading during the period of a little over six months, ended the 31st December last, with regard to which the recent announcement of a distribution of eight per cent. actual (not per annum), with a carry forward of about £11,000, refers. The fact that the net profits should prove to have been only at a rate in the neighbourhood of 2250,000 per annum was undoubtedly not anticipated by interested parties, and we shall look with interest to the publication of the full report and accounts, which it is announced will be rendered available to the public at large, some time during this month. The period covered is a little over six months.
Various explanations have already been hazarded in print, as to the reason for the smallness of the dividend, which it was widely anticipated would be in excess of the rate of 30 per cent. per annum, but it appears to us that there can only be two chief reasons for the result under notice. First and foremost of these, we should put the heavy writing down in respect of old motorbuses which must have been necessary ; in spite of generous depreciation by the old L.G.O.C. during its last year of independent existence, the wholesale " scrapping " methods of the new administration will of necessity have made very considerable inroads into the balance available from revenue account. The second reason, and here we tread on uncertain ground in the absence of definite information, is found in the price that is charged to the L.G.O.C. for motor chassis by the Associated Equipments Co., Ltd. ; Sir Edgar Speyer, possibly, may feel inclined to give some information on this point, and to deal with its effect upon the profits of the L.G.O.C. undertaking as such. There is nothing this time for holders of either the Ordinary or the " A " shares of the Underground Co. Subject to there being no abnormal contract for chassis purchases or repairs, the year 1913 should see a big advance—even to a net profit of 2850,000.