FACTS FOR INVESTORS.

Auckland Star, Volume LXIX, Issue 136, 11 June 1938, Page 4

FACTS FOR INVESTORS.

BRITISH TOBACCO CO,

HUGE TANGIBLE ASSETS. PAYS REGULAR DIVIDENDS. The British Tobacco Company (Australia), 1/td., is alwaye looked upon as a barometer stock, and on-i of the market leaders. It may be of interest to note that the paid-up capital of £9,619,186 ie the second greatest of all companies listed on the Sydney Stock Exchange. The capital consists of 1,484,727 preference shares carrying 6Vz per cent per annum, and the balance is in ordinary ifhari's of ill each. In the past excellent results have been disclosed, and from 1919 to 1927 dividends at the i ate oi 12 per cent per annum were paid regularly. In 1928 the rate was reduced to 10 per cont, and the undermentioned summary of dividends and piofits .-shows the results since that date: — Dividends, l'ref. Ordinary. Yi-.ir. I'rolit. ti} p.c. p.c. Amount. (X-r. C <C t r.»-".» .... l.oii.:>u7 '.tc.r.tiT 11 S!M.7!m) l'.'.'lit .... 1.074.(>72 UCi.r.U" 12 !»71i,13"> l'.tol .... 747.i>27 fMi,SO7 S (i>10.757 v.i.'W .... r>s."i,L".t!i «is..-,07 •; 4SS.OOS l!>3;i .... ."iS.-i.till !Mi.r>o7 II -ISS.OUS 1!>;U .... .*Ns.fitl !Mj.r»(l7 i> 4SS.I«>B I!>:>."| .... ■"5γ). , .!."! , ) '.Mi,r>o7 •", 4SS,O(iS lilSli .... <>(>", 7lil !m;,.">07 7 ~il\DAlV.f.'u .... 1111.3X0 5M1.507 li> 513,44 ii In addition to tlie profits shown for last year, tin , company received a distribution out of the accumulated prirtittt of the su'.widiaiy coiu]>.inies, amounting to U:;u7.l7H. and paid to its shareholders a bonus dividend of Od per shale, absorbing i."3(i.->.042. which is not recorded above. Ihe balance-sheet of tho company to October :il last tthnwprl that creditors' weio owed £17.824 only, while assets consisted Shan's in subsidiaries at cost . 7.~'SJ.\'.)J Debtors and dcliit lialaiices .... ;:.108.t>24 Cash at bunkers 14,0,">7 The balaiirc-slicet of the company, therefore, does not convey much information, but since the last meeting of shareholders the directors have issued a consolidated statement of assets and liabilities embracing the figures of the various subsidiary companies, namely: \V. I), and H. O. Wills (Aust.), Ltd., British Australian Tobacco Pty.. Ltd.. States Tobacco Pty.. Ltd., S. T. Leigh and Co.. Ltd. The statement compiled to 31, 1937. did not jrive any information runcerninjr the profits of the subsidiaries, but showed assets and liabilities as under: -

ASSETS. Fixiil assots- ■■- e I-a ml and building's 1.07r>,0i>2 Plant and machinery 1.312,121 Floating Assets — Stock r,.'_ , 0.",.747 Debtors , balances I.lßl,'JftL , liiivprnmcnt securities !fj".BK.-| Stocks and shares 14,247 Cash en ■•{tn IlitanKihle assets--Goodwill and trademarks .... 2.c>03.104 13.489,310 LIABILITIES. Preference cnpltal 1.484.727 Ordinary capital 8.1.14,430 '.Uil'.t.ieti Preference c;ii>itnl not heltl by parent company '. 12,5">f> R<wrve r>^7.474 Reserve for plant, buildings, etc. l.S~lil»8 Profit and loss account Ti11,501 11. , .54!t.(>!tf) Creditors f>39.317 13.489,316 The position disclosed ie one of undoubted financial strength, and confirms the market's opinion of the parent company's chares.

The registered office of the company is in Melbourne, and there are mhare registers in Sydney. Melbourne and London. Commenting on these results the Sydney "Morning Herald"' says: —

"Its record has been one of outstanding success, and to-day the ramifications of the business are enormous.

"Indirectly the British Tobacco Company (Australia), Ltd., controls the major portion of the tobacco trade of the Commonwealth.

"Dividends are paid quarterly, and declarations since last balancing date have been at the rate of 8 per cent per annum. "The preference ehares are quoted:— Buyer 30/3, without a seller, and the laet sale recorded was at 30/e, at which price the yield ie only 4M per cent, a little better return than that obtainable from Government stock.

"The ordinary shares are quoted:— Buyer 48/, seller 48/9. with the laet recorded price of 48/3, and at this figure the yield on a 10 per cent per annum dividend basis is 4% per cent. "It would seem, therefore, that investors are relying on n maintenance of the 10 per cent dividend rate. The shares can be held with confidence, but they are not likely to see much higher prices for some time."

Australian Glass. Although Australian Glass shares have lost some ground in the market since the unchanged dividend was announced all scrip offered for sale in being readily absorbed (says the "Melbourne Argue.") Buyers do not seem to be so interested in the dividend rate as they are in the likelihood of an announcement being made at the annual meeting that will some compensation for the low yield at ruling market prices for the shares.

COLONIAL SUGAR COMPANY. FIBRE BOARD INDUSTRY. It ie announced on behalf of each organisation that a marketing agreement has been entered into between the Colonial Sugar Refining Company, Limited, and Masonite Corporation (Australia). Limited. The Colonial Sugar Refining Company, Limited, which is at present marketing insulating board, semi-hard board and acoustical board, will also market, through its newly-constituted building materials division, Maeonite products. This important step-, the announcement further states, has been taken to ensure that the building materials in question shall become available at the lowest equitable prices possible. Economical and practical advantages of this arrangement are apparent, and should greatly advance the general utility of these Australian industries.

PRICE OF GOLD. FUTURE PROSPECTS. Gold has remained round about £*tg~ ;i tine ounce for a long time, and it is on a price no lower limn this that the prolitableuess of many gold mining ventures and the dividends-pf all depend. Whether the price will be maintained is, therefore, ot supreme interest to al! investors in Sold Kliaree. Last year a ecare arose that the Lnited States would reduce its fixed rate of purchasing gold below 3j dollars the fine ounce. But the scare soon died away, because "it was apparent that the United States, with ite immense stock of gold, had too much to lose to permit any reduction. The British authorities have the same incentive to keep up the price, because the gold stocks of Great Britain, though lower than those of the United States, are also immense, and nny reduction in price would result in a heavy lose to the British Treasury. But will gold remain steady at about ite present price? On this subject the writer of "An Investor's Notebook" in the "Financial Times" of London hae this to say:—

"A depreciation in the New York exchange much beyond 5 dollars to the £ would imperil the Tripartite Agreement and the impending Anglo-American Trade Pact. For that reason alone, lam convinced that holders of gold ebares may feel confident that the sterling quotation of the metal will maintain indefinitely the

me." of irntmd £7 nil oiinro. at whii-li it hats been held i'ui the :\i»t line: years''