MONEY MATTERS
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Big Increase
dens Profits
L'OR the year ended March 28 last Fodens propose .1 to pay a dividend of 124% which is the rate forecast at the time of the one-for-six rights issue made last April and the same rate paid a year ago. This payment comes out of markedly improved profits. Indeed, the net profit was 1278.088 compared with £185,094 the previous year. At the time when the rights issue was made the directors stated that the company was very busy add considerably better results were anticipated. With this in mind the more optimistic investors expected that the minimum forecast dividend would be exceeded; 15% was freely talked about. And dealers felt there had been quite a bit of buying of the shares based on this expectancy.
Price Dip Despite the undoubted excellence of the profit figures, disappointment that the dividend was in fact to be 124% caused the price of the shares to dip 2s. 6d. to 60s. immediately after the news was out. At this price, based on the latest dividend, they yield about 44%. This company has been the subject of vague take-over rumours (with Leylands mentioned as the likely bidder) in recent times, though these rumours have been consistently denied. Comparisons are odious exercises, but investment analysts need to make them. Matched against some other yields currently obtainable in this section, the present price—viewed purely from the investment angle— would seem to indicate that investors feel that a takeover is still a likely possibility. The current year's
prospects, however, may well play an important part in determining the price level, and the chairman's comments about these are keenly awaited.
Recent buying of WILKINSON'S TRANSPORT GROUP Ordinary shares (quoted on the Manchester Stock Exchange) has been such as to push the price of the " old " up to 23s. 3d. and the " new " (ranking for dividend as from April 1 this year) to around 23s. 6d. This reflects the splendid progress of the group, as these shares came to the market two-and-a-half years ago. Behind this progress lies an extension of the basic business of express parcels carriers. Nevertheless, acquisitions made during the period have been an additional powerful element. And this build-up of the group is by no means at an end.
Further Progress?
In his annual review the chairman comments that the directors are constantly examining new possible extensions. He believes that further progress will be forthcoming. When I inquired (at board level) if, in view of the political risk, some measure of diversification was planned, I was informed that present intentions were to concentrate on the basic business. I was further told that no actual deals were pending. Like the tuarket I am still pro these shares; short of a political upheaval th oy have undoubted attractions.
Martin Younger