Review Of Week’s Stock Exchange Transactions

Press, Volume CIV, Issue 30830, 16 August 1965, Page 17

Review Of Week’s Stock Exchange Transactions

Not so much a battle, just a little strife, would be the best yay to describe the current bid and counter-bid for John Chamfers. There were two more rounds in the contest last week, but tie result should not be hard to pick. Last Monday R. A. Brierley Investments made its formal offer to Jlm Chambers’ shareholders of 45s cash a share to gain a majority ii erest in the company.

On Thursday Andrews and Beaven anliunced that it had received acceptances of ore than 50 per cent of the Chambers’ shareilding for its offer of four of its 20s shares r every five Chambers’ shares.

'lis news was given to Anlews and Beaven sharehol >rs at a meeting where the unanimously approved cap al moves and changes in the irticles of association to acc nmodate its bid for Ch< ibers. I ey gave their approval to lift g authorised capital from £75 )00 to £1,250,000 by ere; mg 450,000 20s ordinary sha s and 50,000 preference shai s. I ’iterated Advice Asr Brierley’s formal offei and before the Andrews and eaven meeting, directors of J in Chambers reiterated then advice for their sharehold s to reject the Brierley Bid. TV were particularly eritii 1 of Brierley’s offer to spre payment of the 45s a shan over more than 12 monl s. Not that Andrews and Beavh have more than half the |ting strength in John Chanters the contest has no doubibeen resolved. Anrews and Beaven are aiinuj at getting not less than 100.500 or 90 per cent of Climbers’ paid-up ordinary capiti of £445.000.

However, the bid could be declatd unconditional if holdes of about 56 per cent of th, capital accept.

Chdibers’ shareholders have initil September 13 to accepithe offer, but this can be exjnded to October 11. S holly after making his formal offer on Monday, Mr Brierlf said his organisation had reeived offers of “thousands f shares” from Chambers’ tareholders. He (limed earlier that his organiition already held 33.231 hares in Chambers—roughli7.s per cent. Mr Bterley seemed to have high hoes that he would get the 22300 shares needed to give hii the majority shareholdingne seeks. But tit was before the Andrews ad Beaven meeting. It sejns that the next move shtild come from R. A. Brierleylnvestments. Andrets and Beaven now have otv to sat back and wait.

Vim-over Turn-oir in Christchurch returned jo normal last week when 86,13 stocks and shares changed lands. The wek before—the first with pos trading—turn-over touched (12,833. Over-aS the market was firm, w|i good gains by banks, g|. loan and agency, woollensand industrial and retailers’sections. Brewers, however, were easier wile a lower profit by New Zejand Insurance announced luring the week held down thj section. Best advances during the

week were by Claude Neon up 2s 6d to 57s 6d, Firth up 2s to 47s 6d, Spedding up Is to 225, Whitcombe and Tombs up Is 3d to 27s 3d, and Steele up 2s to 31s. In the first ex dividend sale on Tuesday, K.P. Drug dropped Is 9d to 55s —its closing price on Friday—while Wilsons Malt fell 3s to its lowest price this year of 275. Disappointing Tekau Knitwear has had another disappointing year and directors have recommended passing ordinary dividend.

Consolidated profit recovered from £995 last year to £19,920 in the latest year, but this represents less than 5 per cent on paid-up ordinary capital of £400,000. Directors recommend the full preference dividend of 5 per cent, and this will absorb £2500.

Tekau’s profit pattern has been erratic in the last few years, and on occasions barely covered total dividend payment.

In 1964, a loss of £23,606 by the subsidiary, Bruce Hosiery and Knitwear, caused directors to recommend passing final dividend. Even so, total dividend payment was £18,500. Late in 1964 directors announced pre-tax profit for the first six months of the latest year was £37,135. Allowing for a taxation provision of about half on this and a loss by Bruce Hosiery of £6446, net profit in this period would be about £11,500. Directors then said that this result should be equalled in the second half. Retention of all but the amount required for the preference dividend will improve working capital. Current assets ratio to current liabilities fell to 1.4:1 in 1964 from 2.4:1 in 1963, and bank overdraft rose £232,083 to £313,156.

It could be some time before Tekau returns to its steady 9 per cent dividend. On paid-up ordinary capital of £400,000, this would take £36,000 and only once—in 1962—has profit exceeded this. Announcement of the dividend passing came after the close of trading on Friday so Stock Exchange reaction will not be known until today. When directors issued news of passing of the final dividend last year, prices of shares fell from 27s 6d to 20s in two days. Prices then recovered to 23s by the end of March, in spite of passing the interim dividend, but since then have slipped to 20s.

Insurance

Conditions in some insurance markets could improve,

the chairman of New Zealand Insurance (Mr A. U. Wells) said last week.

His company had record premiums and slightly lower losses and expenses in the latest year, but a substantial increase in provision for unexpired risks brought profit down by £89,811 or 9.2 per cent to £883,249. The provision for unexpired risks represented 55.2 per cent of premiums, a rise of 0.5 per cent on last year’s figure. Dividend has been held at 10.83 per cent and will take an unchanged £698,360. This is covered 1.26 times by profit.

Motor insurance in New Zealand is sitdll a dominant problem, and Mr Wells believes that insurers may introduce some radical changes in this field. Note Issue , Cyclone Industries unsecured convertible note issue will raise £85,000 for expansion purposes. Shareholders registered at the close of business on August 27 will be entitled to one 5s note at par for every 5s ordinary share held. The notes will bear an interest rate of 61 per cent and on March 31, 1970, every six notes will be converted into five ordinary shares. This is the second occasion Cyclone has made an issue other than by ordinary shares since 1958. In that year £25,000 was raised by a convertible debenture issue, and this was redeemed in 1963. On the latest balance date figures, the new issue will lift term liabilities from £99,000 to £184,000. C.O.P. Interim Cash Order Purchases halfyearly profit showed the benefits of recent take-over successes and consolidation moves.

Group trading profit more than doubled to £13,841 on that earned for the first half of last year, and directors have declared a steady interim dividend of 6 per cent. Mergers last year lifted consolidated ordinary capital from £lOO,OOO to £150,695 at balance date.

Because of this, interim dividend payment will be higher than the amount of £8760 paid last year, but this is at least off-set by the profit rise.