Monday's continued debacle in the metal market aroused fears as to the position of Metal Traders, Ltd., the £1 shares of which met with a good deal of selling at the beginning of the week, shedding some 4s. to around 52s. 6d. Dealers had many inquiries as to whether the Company was likely to be implicated through its business as dealers, brokers, refiners and distributors of all metals, but it is pointed out that, since business is principally transacted against firm orders, the possibility of loss through the fall in metal prices is somewhat remote. Reference to the last balance shoot shows that, although stocks of metals were valued at the then market prices of £888,486, over 86 per cent. were held against sales for forward delivery.
I understand that recent demand for the shares was of an unusually knowledgeable character. The business is under astute management, and the total distribution for the past year, the first as a public concern. was 30 per cent. Dividend requirements will be larger for the current year to conchide with end-March next, since the issued capital was increased by onethird to £415,760 in May last by a bonus issue of 1 share for every 3 held. Last year's net profit was £82,710, compared with £37,504, but it must be remembered that this substantial increase was largely due to the exceptionally heavy turnover in metals, as a result of purely speculative activity. This will not recur, while the prospect for the American subsidiary, Metal Traders Inc. (New York) is much less promising.
Although the shares now yield close on 11+ per cent. on the basis of the past distribution, this return is no more than in reasonable proportion to the seemingly variable earning ability of the Company, while I should not be surprised to see a slightly reduced rate in respect of the current year. At the same time, the shares have already experienced a very considerable fall, the peak price touched this year being 85s. 3d.