COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume CIII, Issue 30575, 19 October 1964, Page 18

COMMERCIAL Review Of Week’s Stock Exchange Transactions

Neither Mr Khrushchev’s retirement nor the British Labour Party’s success in the General Election seemed to have had any effect on the closing stages of last week’s stock exchange trading, but perhaps the news reached New Zealand too late for any implication to be weighed. In any case there was interesting news much closer to home with bonus issue announcements during the week from South British and Whitcombe and Tombs.

New Zealand share markets seldom react to international affairs. Ripples caused by crises in world affairs spend themselves before reaching here.

shares in equal proportions. At first sight this looked as though control of the smaller organisation had passed to C.FJd. and New Zealand Refrigerating, assuming that the Sims family held the bulk of ordinary shares. North Canterbury Sheepfarmers has paid capital of £28,341 in 20s ordinary shares and £36,690 in 20s redeemable cumulative preference shares.

This time there could be local reaction if any moves by Britain’s new Government

South British Insurance’s announcement of a one-for-two bonus issue from pre--1957 holdings was one of the two company news highlights of the week. Along with the bonus news was the announcement of dividend increase to 18 1-3 per cent for the year, against 17J per cent last year. Auckland was first to get the news of the bonus and reaction was immediate. Befor the announcement on Tuesday sales were made at 51s 9d; after, there was a 3s 3d jump to 555. No sales were made on any of the other exchanges. Christchurch closing quotes were 51s 6d buy, 52s sell for both the old and B shares. Wider reaction came on Wednesday with gains in Christchurch and Wellington. Auckland sales opened at 56s 6d, edged back to 565, then closed at 55s 9d for the old shares, while the B shares moved up to 565. In Wellington both the old and B shares sold at 56s and the old shares sold for the same price in Christchurch. South British capital, all ordinary, will be lifted by £2,424,838 to £7,274,514 by the new issue.

force British investment further afield—perhaps to the Australian market. But Australian share trading can be extremely sensitive to Wall street, which late last week reacted sharply to changes in the Kremlin. N.Z. Market Back on the more familiar ground of the New Zealand share market trading closed the week on an irregular note with New Zealand shares firm, but overseas issues easier. This was also the pattern on the week’s trading, with New Zealand rises just ahead of falls and overseas advances lagging behind declines. New Zealand leaders held roughly in balance, but key Australian stocks lost ground. Turn-over was higher than the low level of the week before, but the range of issues was steady.

However, all shares have equal voting rights—one share, one vote for both ordinary and preference—so there is no change of control.

This was stressed by North Canterbury Sheepfarmers’ chairman (Mr I. A. Hart) when he told of the move early last week. “This does not constitute a take-over, nor a merger,” he said. Good Results This year’s good trading conditions is further reflected in two Christchurch-based companies’ annual reports released on Friday. One of these, Beaths, recovered its profit which fell last year and the other, Andrews and Beaven, had a record year.

Modernisation of departments in Beath’s Christchurch store is one reason for turn-over being a record in the latest year. Profit fell £12,101 to £B9OB in 1963, but recovered to £20,120 in the latest year. Last year’s dividend requirement was not covered by profit, but the improved earnings in the latest year cover dividend payment 1.8 times. With one exception, branches improved their contribution to the profit and made worth-while turn-over increases.

New shares rank for dividends declared after November 26. The issue will be based on holdings at November 13. Whitcombes Too

On Friday Whitcombe and Tombs also announced a one-for-two bonus issue from pre--1957 profits. If shareholders give their approval to the move it will lift capital to £1,167,375. On last balance date paid capital was £758,250, but during the current trading year there has been a placement of 40,000 10s ordinary shares for the take-over of a subsidiary Whitcombes’ directors were cautious about future prospects in their announcement. They emphasised that the issue did not increase the earning power of the company and future dividends must depend on earnings from year to year.

A. and B. Lift Andrews and Beaven’s lift of 22 per cent in profit of £85,099 for its latest year is largely a reward for steady expansion in recent years. Since 1958, when the profit was £33,392, earnings have risen steadily except for a slight setback last year. Depreciation, £10,372 higher at £38,064, reflects added plant and buildings in fixed assets which have risen £96,589 in value to £536,939. The latest profit covers dividend requirement 2.9 times. Although the year’s results are satisfactory, the chairman of directors (Mr R. C. Neville) considers that an inflexible system of import licensing is restricting trading. He suggests that trading organisations prepared to

Along with the bonus issue proposal was a plan to lift nominal capital from £lm to £2m, presumably for possible future expansion. Meat Deal An interesting local announcement during the week was that the ordinary shares in North Canterbury Sheepfarmers’ Co-operative Freezing, Export and Agency Company held by Sir Arthur Sims and his family had been acquired by the local “big two” freezing companies. C.F.M. and New Zealand Refrigerating acquired the

undertake development and local production of equipment normally totally imported, should receive some preference. Hay’s Plans Hay’s, after several years of expansion, plans to consolidate in its current year. Its annual accounts released late last week confirm profit down by £20,774 at £80,676 but show fixed assets £222,415 higher at £1,272,925. Depreciation exceeding £330,000 has been written off fixed assets in the last five years and in this period land and buildings have increased in book value by £720,000 to £967,572. The supermarket at Sydenham had nearly reached the “break-even” point after nine months of operation and should become, like the supermarket at Riccarton, profit earning within two years, said the chairman of directors (Sir James Hay) in his report. Zoning difficulties have hampered the proposed supermarket at Papanui but consolidation is the main reason why construction work will not start in the current year. Southland Cement Shortage of cement in and around Auckland earlier this year pushed up sales of Southland Cement by 14 per cent to a peak 17,939 tons, according to the annual report released last week.

However, although the latest profit of £13,585 wiped out a deficit of £5107 in the profit and loss appropriation account, dividend is again passed.

Auckland’s cement shortage was obviously an ill wind that blew Southland Cement some good, but it seems the dust has now settled and the company’s fortunes will not get the same assistance in the current trading year.

Southern Motels (N.Z.) was registered as a public company last week with a nominal capital of £150,000 and building of a motor hotel at Alexandra is to start immediately. Allotment of shares to Southern Motels issue of 400,000 5s shares was made last week, but subscription lists are being kept open. The Alexandra motor hotel will be the first of a chain planned-for Haast Pass road tourists.

Howard Smith. Howard Smith, Ltd., Melbourne Investor, ordinary paid capital has been Increased from £4,104,550 to £5,058,613 by the allotment on October 12 of 954,063 fully paid £1 ordinary shares to former shareholders of A. Goninan and Company, Ltd., New South Wales manufacturing and constructional engineer. There will be further allotments arising from the take-over scheme.— (N.Z.P.A.)

Taranaki Dividend.—Taranaki Brewery, Ltd., directors recommend a 9 per cent dividend, against St per cent last year; payable November 25, ex dividend November I.—(P.A.)