TOTALISATORS, LTD.

Press, Volume LXIV, Issue 19448, 23 October 1928, Page 10

TOTALISATORS, LTD.

flotation op a company. allotment POSTPONED. (took ou» ow* cobbespokdbst.) LONDON, September 1. A rather peculiar position, has arisen in regard to the flotation ot the company, Totalisators, Limited, which has as its object the purchase of tho British rights of the "Julius" totalisator machine. The prospectus was issued and published last week. Some unfavourable comments appoared in the Press, and now the directors have closed tbe lists and postponed allotment. It was stated in the prospectus that Lloyd s Bank are authorised to receive applications in respect of the issue at par of 400,000 10 per cent, tax free (up to 6s in the pound), participating preferred shares of 10s each in Totalisators, Limited, which has contracted to purchase from Automatic Totalisators, Limited, of Sydney, the righ,ts for Great Britain and the Irish Free State in the "Premier" or "Julius" totalisator machine. The machine is described as entirely automatic and electrically controlled, and capable of registering 250,000 bets per minute. It has been installed for some years on the principal racecourses of Australia and New Zealand, and recently on the Longchamp course at Paris, and tho directors are of opinion that while it is impossible to stato which particular type of riachine will be adopted by the Control Board in this country the "Julius" has a strong chance of adoption. The profits of the company will be derived from tho manufacture, erection, and operation of the machine, but until tho Control Board approves the machine the directors are unable to give any estimate of the amount which will accrue to the company. The purchase consideration payable to Automatic Totalisators, Limited, is £IOO,OOO in cash, plus a royalty at the rate of one-eighth per cent, of the total amount of money passing through any totalisator manufactured and supplied under the company's patents, with a minimum of £2OOO per .annum. A sum of £30,550 in respect of various services is also payable to Inventions Exploitations Trust, Limited, which trust also applies and pays in cash for shares in the company of the nominal valuo of £25,625, and a further sum of £17,250 is to bo paid in respect of preliminary expenses. Tho preferred shares are entitled to half the surplus profits after payment of their non-cumulative 10 per cent.

Ail Unusual Flotation. "The Times," though it advertises the prospectus, points out thst the flotation is of an unusual kind. "That the 'Julius' is a most ingenious machine and that it has successfully stood the test of some years' operation on racecourses in Australia, New Zealand, and elsewhere oversea is a fact not in dispute. "There arc, however, a number of other automatic machines in existence designed to fulfil a similar purpose. How far any of them at present meets the requirements of a large racecourse is a question outside our province, .but it may be taken for granted that a body such aB the Control Board will not enter into a binding contract with any group until it has made an exhaustive examination of the various totalisator machines taht are available. Moreover, as a body charged with a deep sense of responsibility to the public, its decision will have to be based both on the considerations of relative efficiency and relative cost. In this connexion we may remind our readers of tho recent remarks of Lord of Dalzell, who in warning the public against rash investment in totalisator propositions, said that the Control Board would 'never agree to the adoption of any machine, whatever its excellence, if the terms on which it has to be acquired will impose an unfair charge on the public who use the machine.' It is obviouß that with the decision of the Control Board a matter impossible to forecast, the shares of the new company ought not to "be bought at present by anybody who is unprepared to incur ft large degree of risk.

I Question of Equity. "We have dealt first #ith what is the vital consideration that must weigh with the public over the appeal made to them to take up shares in Totalisators, Limited, but there are on© or two other points about the flotation that invito comment. Of tho authorised capital—namely, £250,000— aa much ao £245,000 is in participating preferred shares, whoso income • rights are restricted to a tax-free dividend of 10 per cent., plus 60 per cent, of the surplus profits. The other SO per cent, of surplus profit? is all to belong to £6OOO of deferred capital, none of which is being offered to the general public. To ask the public to take the great bulk of the risk while severely restricting its rights to the equity is not a practice that can be commended. Further, tha payments of a preliminary nature associated with tho promotion seem relatively rather onerous. In addition to £17,350 payable to the French, British, and Foreign Trust, Limited, for what may be called the customary preliminary expenditure, the company is under obligation to pay £30,560 to another concern, tha Inventions Exploitation Trust, Limited, for other services rendered. This intermediary is taking up shares _of the nominal value of £25,625, which includes 72,600 of the total of 100,000 deferred Is Bhares that, as- we have stated, are entitled to 50 per cent, of the equity. • In a published statement the directors have mow intipated that they have closed the lists and have decided to postpone allotment. They further state that "no intimation of any objection was made until practically the whole of the public advertising waß completed. Had any intimation been given to the directors earlier, they_ would have had an opportunity of considering the position before incurring the necessary expenses of an issue "The directors can say with confidence that if tha purchase of the machine had been made conditional on the license of the Control Board first being obtained, \ the terms upon which it could have been purchased would have been far less favourable to the company than fhe contract it has entered into. : . , , "Whatever decision may be come to Dy the directors with regard to allotment, it .is their intention to complete the purchase of the patent rights of the 'Premier" or 'Julius" machine, as they are confident that this machine is the one which will-be ultimately adopted to be in general use. LINCOLN MILLS (AUSTRALIA), LTD. Lincoln Mills (Australia), Ltd., " Melbourne holding company whose subsidiaries are Lincoln Knitting Mil s Proprietary, Ltd., and Lincoln Spinning Mills Proprietary. "<!•> did not receive any dividend from its sub sidiary companies for the year ended June 80th, and consequently shows a loss of £l6lO, amounting to its expenses, compared with a profit the previous year of £37,500, wholly Provided by dividends from tho subsidiary companies. With a credit of £1348 brought forward there is carried forward a credit of £261.' The position, however, is not what the figures of the parent company imply. Tho combined, profit of tho two subsidiary comDsnics was £36,900, againßt £38,860 the previous year. With a balance of £5325 brought forward there was available £42,225, Jut the directors of the subsidiary companies decided to carry the whole of tho amount forward, and the board of the. parent company considers that this policy is m the best interMts of the shareholders in order to place the finances of the subsidiary companies on a sound commercial basis. # The capital of the parent company, Lincoln Hills (Australia), Ltd,, is £480,527, of which £4OO 000 is nine per cent, cumulative preferpnee' Its assets are Bhares in, and advances to other companies, the subsidiaries amounting to £481,430, which compares with £519,030 a year previously. The combined statemnnt of the two subsidiary companies shows n capital of £469,122, all of which is held w the parent company or its nominees, and advances by that company of £12,308, against *49 908 a year previously. Sundry creditors, ♦Aether with the reserve for taxation, are otfted at £278,929, an increase of £47,824. A«sßts are valued at £802,585. Sundry debtrmf owed £149,997, or £19,997 more than in the previous balance-sheet, £318,026 consists of stocks on hand, being £36,009 above the figu'e a year ago; land and buildings at fQ9 463 with the additions made and allowing for depreciation, are £1743 lower. Plant and machinery, on which £12,500 was spent during fear , after allowing for depreciation, are valued at £235,098, a reduction of £7219. The report Btates that though trading conditions were difficult the spinning mill was we ll and profitably employed. The knitting mill did not show the result anticipated, due to the severe trade depression Experienced during the twelve months covered by the accounts. An improvement iu trade conditions is now apparenk^^^^^^^^^^