Review Of Week’s Stock Exchange Transactions

Press, Volume CIV, Issue 30764, 31 May 1965, Page 17

Review Of Week’s Stock Exchange Transactions

ners S ,? r^. se ’ dorn » if ever, object-lessons in manWell in ot nn iw i/ 11^ 310 ? ate last week of what it felt about t i * . T IS ln § s ca sh offer was perhaps just slightly less wkhdrZn OUS * St " g WaS announced th eoffer had been

sharp ?ffpr U Wellington Publishing’s 65s a 20s “Truth” w aa t n ° dl ?? end Payment should be made without its consent, but this was ignored by an announcement on Friday.

c , directors said they recommended a final dividend of 7.3 per cent on ordinary capital increased by February’s one-for-four bonus, making 10.5 per cent for the year

Commenting on the move,; “Truth” chairman (Mr J. H.i Dunn) said his had simply recommended a final dividend. “As far as I am concerned. to hell with the Wellington Publishing Company,” he -added. ' Perha P s > it may be felt, Mr -Dunn's comment was rather ‘ blunt, but he was only under- . lining his directors’ advice to -shareholders earlier in the "week that they should turn , down Wellington Publishing’s -offer.

Inadequate They told shareholders not ‘to accept because they felt the -offer—worth roughly £772,000 'r-was inadequate. In any case, said Mr Dunn, “Truth” directors were not -going to sell their shares and so the Wellington Publishing bid could not succeed. Meantime, the first issue of the “N.Z. Sunday Times” has rolled off the Wellington Publishing presses for free distribution, and some copies are being handed out in Christchurch. This coming week-end the battle will start, with two Sunday newspapers being published in Wellington. Slight Lift Final ordinary dividend of “Truth” of 7.3 per cent, after the interim 4 per cent, makes a fractional increase on capital raised by £47,527 to £237,637 by February’s issue. “Truth” dividend has been a steady 12 per cent since 1960, and it was 10 per cent for four years before that. When directors announced plans for the bonus 'issue in February they warned that the 1965 dividend would be “no greater than in the previous year.” This was because a very large amount of depreciation would be written off for the year because of heavy spending in the last two years on plant and equipment. The approach of the directors was cautious, but in the current year the acquisition of A. D. Organ, a move into the Sunday newspaper field and perhaps more spending will have to be taken into ■ account. However, this problem will have to be faced by any I

i organisation that begins pubI fishing a Sunday newspaper. Newspaper stocks were | variable on the week: Truth | sold 2s up at 60s, after touching 60s 6d in Christchurch and Wellington sales on {Thursday, Wilson and Horton i recovered 6d to 28s 6d while Wellington Publishing sold at 30s 3d, ex dividend of 6d, in Wellington on Tuesday. More Active Trading was more active over a wider ranger of issues last week. Turnover on the Christchurch Stock Exchange was 100,511, against 95,542 the week before. There was a higher turnover in banks, breweries, frozen meat, loan and agency, Australian industrials and retailers, and mining. Lower turnovers were shown by insurance, wool and textile, New Zealand industrial and retailing, and unlisted stocks. Frozen meats were firm on the week with South Otago gaining 2s to 40s, and Southland Frozen Meat 9d to 26s 3d1 C.F.M. rose 6d to 41s, Gear 6d to 15s 6d, ex dividend, \vhile N.Z. Refrigerating at 17s 6d and the notes at 15s each rose 6d. Banks Rise

Among banks. C.B.A. rose 3d to 20s 9d, and National Bank of N.Z. Is to 45s 6d, but no sales were made after it was called ex 7 per cent dividend on Friday. Bank of N.S.W. fell Is 9d to 52s 6d. Breweries eased with Dominion down 6d at 17s lOd, N.Z. down 2d at 14s 4d, and Tui down 3d at 8s 3d.. A marginal gain by South British was the only advance by insurances; National and New Zealand both eased 3d. Cash Order Purchases was a highlight among loan and agency with a 7d rise to 13s 9d along with N.Z.F.C. 6d up at 9s 8d after selling at 9s 9d on Monday and Tuesday. General Finance lost 9d to 13s, Newton King 3d to Ils 6d, and Wright Stephenson 6d to 32s 6d. New Zealand industrials, distributors and retailers followed a firm trend and there were some good gains in this I section of the list.

A. and T. Burt rose Is 6d to 435, A. J. Entrican Sims 3s paid Is to 7s, A.B. Consolidated 2d to 6s Bd, Auckland Laundry 2s 6d to 30s, Burnett 2d to 5s lOd, Claude Neon 4s 6d to 60s, D. Henry 4s to 35s 6d, M.C.P., in first business since merger talks. 2s to 7s 6d, Northern Steel 2s to 295, and N.Z. Industrial Gases 2s 6d to 80s. Rises by Australian industrials and retailers outnumbered falls two to one. Best advances in this section were made by Ampol, Ansett notes and H. C. Sleigh, but some key stocks were marked back sharply: A.C.I. lost Is 3d to 50s 6d, B.H.P. 9d to 44s 9d, Cox Brothers 3d to Is 2d, and Waltons Is 4d to 8s 6d. Gas Profits Two gas companies released their accounts during the week and both reported lower earnings.

In the two areas—Christchurch and Auckland—the winter last year w r as comparatively mild, affecting the demand for gas. Profit of Christchurch Gas, Coal and Coke Company was down by £4262 or 12.4 per cent in the latest year after providing £9536 more for deprecation and £7960 less for taxation. Even so, the net result of £30,131 leaves £7073 after paying a steady dividend of 6 per cent. Last year's profit was £34,393 and gave an average earning rate of 5.3 per cent on shareholders’ funds.

This year, freehold land has been written up to 1964 Government valuations, lifting total shareholders’ funds by £194,143 to £843,165. Average earning rate on these funds is 4 per cent. Total reserves have risen from £264,725 to £449,002. Survey Share An expense of £7605 for its share of a natural gas survey reduced Auckland Gas Company’s working profit from £68,041 to £57,880. However, lower taxation provision of £25,540 (£34,709 last year) brought the net profit of £32,460 to within £992 of last year’s. A change ih manufacturing processes brought wide changes to the working account during the year. Manufacturing costs were cut, but less residuals were produced, partly off-setting the gain. In the light of the preliminary report on natural gas, this company appears to have an interesting future. Under certain economic conditions. the use of natural gas is feasible in Auckland, says the report. Gas piped to Auckland should be competitive in price with electricity and light fuel oils. In his report to shareholders the chairman (Mr A. G. Wilson) says gas is an ideal fuel for industry and commerce and directors are confident that any difficulties in piping gas from Kapuni will be overcome. An unchanged 5 per cent dividend takes £26,617 and is covered 1.2 times by the profit. Alloy Steel Alloy Steel (N.Z.), engineers and steel founders at Sockburn, had its best year ever and lifted its profit by £3285 to a record £15,946 in the latest year. Dividend is unchanged at 10 per cent and the £B4OO required for distribution is covered 1.9 times by profit.

General reserves have been increased to £35,000 by the transfer of £lO,OOO and total shareholders’ funds are £124,629 against £117,074 last year.

Average earning rate improves from 8.3 per cent to 13.2 per cent. Because of increasing demand for Alloy Steele’s products, directors are considering extending the plant and equipment. Latest developments in steel foundry work have been examined in Australia. In the latest year the works were at full capacity and total tonnage rose by 14.5 per cent. Less than a week after announcing the success of its bid for the remaining shares in Timaru Milling, A. S. Paterson reported a group profit in excess of £BO,OOO. This surpasses last year’s previous record of £75,667 and returns an earning rate of at least 10 per cent on ordinary capital raised to £809,741. Total dividend is 7| per cent against 8 per cent last year.

During the year, however, a one-for-four bonus issue was made and this, qualified for both interim and final dividends. Paterson has allotted 212,333 of its 10s shares for about 70,777 20s shares in Timaru Milling, leaving about 17,803 Timaru shares which have taken the alternative of 40s a share or have not accepted the offer. Fertiliser Peak Dominion Fertiliser of Dunedin has again lifted its profit to a new peak. The latest result of £90,458

is £13,600 higher than last year and covers the steady 10 per cent dividend requirement of £55,000, 1.65 times. Sales in the latest year rose 23 per cent. Directors are considering erecting a plant at Ravensboume to manufacture sulpuhric acid. The new works in South Canterbury should be operating in 1967. Directors say long-term prospects are good, but warn that the fertiliser market is still sensitive. Buoyant trading conditions

have lifted Cyclone Industries’s profit to a record £48,502, according to a preliminary' announcement. Since 1963 when it slumped £7744 to £22,441, profit has more than doubled and covers a steady ordinary dividend payment of 9 per cent more than twite. Ordinary capital was lifted by £51,000 to £255,000 in the latest year by a one-for-four bonus issue.