"OUTLOOK OBSCURE"

Evening Post, Volume CXXVII, Issue 74, 29 March 1939, Page 14

"OUTLOOK OBSCURE"

SPREAD INVESTMENT

THE KEYSTONE COMPANY

"The outlook for investment still remains obscure end accordingly a conservative policy is being pursued by the directors in making investments and this is indicated by the amount invested in preference shares." The paragraph occurs in the first annual report and balance-sheet of Keystone Investments, Ltd., Wellington, an investment company with holdings of a diverse character, mostly in Australia and consisting of two-thirds ordinary shares. The directors report that total revenue for the year ended January 31 last amounted to £573 6s 4d and expenses to £165 12s 6d, leaving a net surplus of £407 13s lOd, from which an appropriation of £15 was made to a reserve for possible taxation. Before this surplus was ascertained, full allowance was made for interest on payments in advance of calls at the rate of 4 per cent, per annum.

The directors recommend that a dividend of 4 per cent, per annum be paid, to be calculated on the amounts paid up on the shares from time to time. This dividend will amount to £324 4s 3d, less the amount of the interim dividend paid in August last, £114 8s Id, leaving a balance of £68 9s 7d to be carried forward. It is also stated in the report that "the availability of funds for investment, due to the steadily increasing capital. while permitting many holdings to be acquired at attractive prices, has enabled the principle of averaging to be applied. This practice has produced a portfolio which, at balance date, could have been purchased with New Zealand funds, at a cost of only 1.8 per cent, below the balance-sheet cost. Shareholders will be aware that the fall in general market values has approximated 10 per cent, over the last 15 months." _ The capital of the company has increased steadily and during the seven weeks since the balance date more than 25.000 shares have been allotted. The distribution and character of the investments in the company's portfolio are given in an appendix to the report and are set out as follows: — Per cent, of total. Chain stores 28.87 Department stores ~ 4.82 Insurance 1.15 Banks 1.57 Heavy industries 4.54 Building trades 5.42 Finance « 5.97 Pastoral 3.36 Manufacturing industries .. 25.45 Public utility 2.97 Transport 1.24 Newspapers 4.56 Metals 4.66 Miscellaneous 5.42 The investments are distributed as shown in the following table:— Per cent, of total. Shares. Pref. Ord. Total. Australian 26.09 55.52 81.61 New Zealand .. 7.16 11.23 18.39 Totals 33.25 66.75 100.00 The retiring directors. Sir Charles ,Statham (chairman), Messrs. F. W. Furkert, Will Appleton, G. G. G. Watson, and E. Shields-Brown, are eligible for re-election.