Can N.G.G. Shareholders Count
p. 75 · Read in the full issue
On a Good Dividend?
f ’HE Stock Exchange quotation for the A shares of New Guinea Goldfields Ltd. hangs around par (5/-). Yet, on figures, they should be worth more.
The issued capital of this huge concern was originally between £4,000,000 and £5,000,000. Certain interests went gold crazy when the goldfield was first proved, and bought leases in every direction, and paid lavishly for them in fully-paid-up shares.
From 1930 to 1934 the cold winds beat unmercifully upon the Co., and early in 1935 the directors made public acknow ledgment of many shortcomings and de linquencies, and wrote the £ 1 shares down to 5/ which was the price the share markets had had upon them for very many moons, anyway.
Thus, early in 1935, the Co. faced the critical and sceptical world with an issued capital of less than £1,200,000. It looked a good enough investment, con sidering the rich country that the Co. was squatting on in New Guinea (with the permission of an extraordinary sympa thetic government), and it should have been capable of earning 10 per cent. But investors were shy—and justifiably so, because after the end of the next finan cial year, early in 1936, the Co. announced a profit of £152,000, but decided to de clare no dividend and use the money for developmental purposes. The shares re mained at 4/- to 5/-.
All this year, the Co. has been an nouncing a profit of between £12,000 and £15,000 per month. It commenced the financial year, on October 1, 1935, with a credit in the profit-and-loss account of
£211,000, and it should have added about £140,000 to that, for the financial year ended September 30, last. Shareholders might calculate upon a dividend for the year of anything from 10 to 15 per cent.
The directors usually issue their re port in January, and hold their annual meeting in February; and, if there is to be nothing juicy for the shareholders on this occasion, after the “hiding” the latter have had in recent years, the directors will know what to expect . . . That is why these shares should be worth buying at par.