MONEY MATTERS by Martin Younger
Page 88
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Plaxton's—a dividend disappointment
THE board of this firm of coachbuilders recommends a final dividend of 10 per cent to make a total for the year of 224 per cent. This is 2+ per cent below the minimum forecast. Shareholders will feel an added tinge of disappointment when they read that pre-tax profits for the year that terminated on August 31 increased to £402,209 from £373,393 the previous year thus beating the interim forecast of maintained profits for the year. Blame the squeeze for the missing of the dividend forecast.
The year that ended on June 30 was a good one for Seddon Diesel Vehicles. Group net profit amounted to £197,357 against £120,275 the previous year. The proposed final dividend of 6+ per cent maintains the year's total at 121 per cent. The directors also propose to make a scrip issue on the basis of one-for-three. The group's operations in the United Kingdom soared ahead— pre-tax profit moved up to £356,492 from £174,870, but there was a loss by the Rhodesian subsidiaries—£8,323 against a previous profit of £444.
Though the financial year of Robert B. Massey—the Market Weighton (Yorkshire)-based group of specialist coachbuilders, and motor vehicle and agricultural machinery dealers—terminates
on December 31, the results of the current year are not expected to be made known until about March 1967. Nevertheless, 1 feel it is not too early to have a glance at what the prospects of this wellmanaged group appear to be.
To recap:— The results for 1965 showed that gross profit amounted to £121,812 which compared with £126,783 the previous year. This modest set-back was due very largely to the narrowing of profit margins.
About the prospects for 1966, the chairman, Mr. R. B. Massey stated that he believed the streamlining of production, and plant. plus the board's policy of continuing diversification, would produce "worthwhile results". But he warned again that margins remained
under pressure. •
Since this statement was made we have had, of course, the massive July squeeze /freeze with all that it has meant adversely tc the automobile industry; to say nothing of the jobs tax. Neverthe less, at their present price of 7s. 9d. to yield 94 per cent based or the latest 15 per cent dividend 1 go along with a stockbroka friend who recently whispered to me that these shares are wet worth considering for when the economic sun shines again.