MONEY MATTERS
Page 88
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Encouraging News from Stringer Motors
711E chairman of STRINGER MOTORS—Mr. F. C. I Stringer—sends shareholders a highly encouraging message in his latest review: "I am confident that the prospects for our group are good." Mr. Stringer reports that the directors are constantly looking for further opportunities to physically expand the business. Several projects have been examined during the current year. he states, but these did not measure up to the board's requirements. Each year an endeavour is made to improve and modernize the group's different depots. Given reasonable economic conditions Mr. Stringer adds the confident message that he is sure "we shall continue to make progress".
He was reporting upon a year that again saw the achievement of record profits. Indeed the improvement in pre-tax profits was more than 25% compared with the previous year. Since the last trading year ended (on November 30, 1964) the group's properties have been re-valued. This has shown a surplus over book values of X309,808 which will be credited to capital reserve. This latest report underlines my belief that at around their present price of 5s. 6d. to yield 71% based on the latest dividend of 20%, covered 1.7 times by earnings, these 2s. Ordinary shares are an attractive holding.
Problem of Rising Costs
Rising costs are a real problem to WEST RIDING AUTOMOBILE COMPANY. In 1964 traffic and sundry revenue showed a useful advance over the total of the previous year. But a steep rise in operating costs lowered pre-tax income to £119,224 from £161,738 the previous year. In his latest annual review the chairman—Mr. Harry Watson—states that two factors have been largely responsible for the decline in productivity of the group during the past few years. In 1960. he points out, taxation (other than income lax and profits tax) amounted to £271,676. In 1964 it was £333,885, an increase of 23%.
"That an industry which provides an essential service and which is expected to replace unreinunerative rail services, should be so penalized passes comprehension ", he comments. One can almost hear the chiefs of similar groups chanting "So say all of us ". Secondly, he mentions that wages of platform staffs have risen by 25% compared with 1960. And a shortage of staff leads to extensive operation at overtime rates.
Mr. Watson says nothing specific about prospects for the current year. But in a reference to his appointment as chairman, following the sudden death of Sir Ronald G. Leon last August. he pledges that all his efforts "will be directed towards the maintenance of the strong financial position of the company ". The latest balance sheet shows quick assets of around £480,000. These Ordinary Stock units changed hands recently at 21s. At this price the yield is the well-above-average one of 91%. Martin Younger