NEW COMPANIES

Evening Post, Volume CXIX, Issue 51, 1 March 1935, Page 9

NEW COMPANIES

BRITISH FIGURES

RECORD REGISTRATIONS

CAPITAL INVOLVED

Despite the various signs there have been of increased trade activity it is somewhat surprising to find that the total of new public and private companies registered in 1034 was greater in number though not, in capital than for any year since the first Company's Act, writes Francis Williams in the "Daily Herald." As the first Company's Act came into force in 1844, this means that last year's new company registrations created a record for at least DO years, and almost certainly for all time. There was altogether a total of 12,475 new companies registered according to the annual report compiled by Jordan and Sons, Ltd., the company registration agents, of Chancery Lane. Of these the huge majority were, as might be expected, private companies, public flotations dnly accounting for 446. The total capital involved was £143,540,406, of which the public companies accounted for £69,761,622 and the private companies £73,778,784. Compared with 1933 there is a rise in the number of companies registered of 1091, while the total capital for that year was £94,545,556, of which 330 public companies accounted for £39,857,295 and 11,054 private companies for £54.688,261. In 3932 the total number of companies" was 30,204, and the total capital £70,204,496, and in 1931 the numbers were 8385 and the total capital £58,219,756. While the number of new companies registered is, as stated, a record for all time, the total amount of capital involved is, as might be expected, substantially below that in the boom period. In 1929, for instance, while the total number of companies registered was only 8672, against 12,475 last year, the capital involved was £229,500,000, or close upon £86,000,000 more than last year. HIGHER AVERAGE. It is interesting, however, to note that since 1931 there has been not only a substantial increase in the number of new companies and the capital involved, but that the average capital per company has increased substantially, particularly so far as' the public companies are concerned. Thus, in 1931, the average capital per public company was only £46,109. It rose to £70,033 in 1932, to £120,779 in 1933, and was £156,416 last year. During the same period the average capital of private companies rose from £5610 in 1931 to £6133 in 1934, after falling to £4947 in 1933. It is estimated that as a result of the record increase in company registrations there are probably, after taking into account old companies which have gone off the register in consequence of liquidation, some 120,000 live com- . panics on register at Somerset House, a record for all time. The-nominal capital involved in these companies is certainly well over £5,000,000,000. While the # record number of company registrations is certainly a definite indication of increased business activity, it conflicts.somewhat curiously with the record of capital notations during the year. Thus, while new capital issue, according to the Midland Bank statistics, certainly rose in. 1934 compared ■with 1933, and were, indeed, the highest for any year since 1930, they were very substantially below the average per annum during the period from 1919 to 1930. Moreover, according to the "Economist" statistics, which are on a somewhat different basis—it is incidentally regrettable that the two compilers of new capital statistics cannot co-ordin-ate their activities in some waythere was actually a decline in new capital issues in 1934 compared with 1933, the figure excluding conversions being, according to the "Economist," .-\ £169,108,700 in 1934, compared with \ £244,780,500 in 1933. "•■■' While both the Midland Bank and the "Economist" statistics include, of V course, capital offerings by other bor- „ N rowers than companies — British, \ foreign, and Dominion Governments, municipalities, and public boards, for instance —there has been no increase ■J in. the total capital raised by public „ companies of anything like the nature i/ x>f the rise in company registrations. S.^;-- PRIVATE FINANCING. x It would seem, therefore, that to a very considerable extent the activity in business during the year has been financed by money, raised privately rather than by appeals to investors generally. This is not by any means a unique position, for during 1932, when there was virtually an embargo on all public issues, company registrations ac tually reached the record number of 10,204, a figure substantially in excess of those of the boom period for capital flotations. It is interesting to note that the largest number of new companies registered last year was in the food section, where there was a total of 23 public companies and 985 private companies. Land and building came next with a total number of 998 new companies, of which 38 were public. So far as capital is concerned, the largest total was in investment, finance, and banks, where it amounted tp £20,219,423. Eunning a close second, there was the mines and quarries section, with a total' capital involved of £19,326,775. This section includes the many new gold-mining ventures which were established during the year. Land and building, as well as being second in number, was third as regards capital, the total amount involved being £13,142,035. This is undoubtedly a reflection of the continued building activity. .:,■ MILLIONAIRE CONCERNS. As might be expected with the tendency towards higher average capital, there was a steep rise in the number "- , of' millionaire companies registered, that is, companies with capitals of £1,000,000 and upwards. There were in 1934 21 such companies, against eight in 1923 and seven in 1932, and 16 of this 21 were public, four were private, and one was "unlimited." The largest of the pub. lie companies was the Cunard-White Star, Ltd., with a nominal capital of £10,000,000, and the second was the. Morgan Crucible Co., Ltd., . with % nominal capital of £4,237,000, while Griffiths Hughes Proprietaries, Ltd., the manufacturers of Kruschen and other proprietary articles, came third with a nominal capital of £2,500,000; the private millionaire companies wore headed by Morgan Grenfell and Co., with a nominal capital of £5,000,000. This represented, however, simply the re-registration of a company which was formerly "unlimited." There were also during the year 24 companies registered with capitals between £500,000 and £1,000,000. Another interesting fact is the activity in companies concerned with aviation. Some 72 companies more or less connected with aircraft were registered during the year with • a total nominal capital of £989,320, seven of these, with a total capital of £72,800, being public. While it is difficult to assess exactly the significance which can correctly