1936 Prospectus

A ‘prospectus’ letter was produced by Mr Sydney Player to invite applications to subscribe for 200,000 ‘A’ 5s shares at 5s 9d each. The document is signed and dated 1st July 1936. The contents included the following statements:

The principal machine tool products of the company are mechanical lapping machines and thread grinding machines, both of which are extensively employed in the manufacture of aeroplane and automotive engines and all types of precision engineering. These machines are marketed through the sole selling agents, Alfred Herbert Ltd., of Coventry, at prices which range from approximately £200 to £1,800. Amongst the users are such well-known firms as:

  • The Austin Motor Company Ltd.
  • Peter Brotherhood Ltd.
  • Ford Motor Company Ltd.
  • Alfred Herbert Ltd.
  • Humber Ltd.
  • Leyland Motors Ltd.
  • Rolls-Royce Ltd.
  • Rushton & Hornsby Ltd.

“Our other products, principally Newall gauges, are in general use throughout the engineering trade in this country, and amongst the customers in this section of our business may be numbered the following:

  • Sir W. G. Armstrong Witworth Aircraft Ltd.
  • The Associated Equipment Co. Ltd.
  • John Brown & Company Ltd.
  • Dennis Bros. Ltd.
  • The Fairey Aviation Company Ltd.
  • The Raleigh Cycle Co. Ltd.
  • Short Brothers (Rochester & Bedford) Ltd.
  • Vauxhall Motors Ltd.
  • Whitehead Torpedo Co. Ltd.

“The Company is on the list of Contractors to the War Office, Admiralty and Air Ministry and is an approved Test House (in its own section) for the Aeronautical Inspection Directorate.

“During the past year, the Company has also been engaged in the development of jig boring and automatic screw grading [[should that be ‘grinding’]] machines of types which will shortly be placed on the market, for which an equally wide demand is anticipated. The experimental and development costs incurred in bringing these, and the machine tool section of the business generally, to the commercial stage have been considerable and have been entirely charged against profits.”

Referring to the company’s profits, the document states that the Accountants’ Report for the years ending 31st March 1934, 1935 and 1936, shows a profit of £2705, £2,140 and £12,042 respectively. These figures relate to net profit after charging all development expenditure and depreciation. After also charging management remuneration, director fees and Income Tax, the figure for the final year, reduced to £9,492. “This calculation is based on the results of the last year only, and my co-Directors and I are of opinion that it represents considerably less than the normal profit earning capacity of the business as now constituted. The machine tool section of the business only emerged from the development stage sufficiently to reflect itself in the profits for the year ended 31st March 1936, although during that period the business was still handicapped by the dislocation caused by the removal of the works to Peterborough. It will be appreciated from the figures of profits that such removal caused considerable disruption in the year ended March 1935. 

“During the current year the turnover to date is considerably in excess of that for the same period last year, and I am taking a strictly conservative view of the position in stating that there is every indication that the profits for the year ending 31st March 1937, on the basis adopted in the Accountants’ Report, will not be less than £16,000.”

The letter also states that:

“I (Mr Sydney Player) have entered into an agreement to serve the Company as Managing  Director for a period of ten years and Mr. Summers has entered into a similar agreement as General Manager for a period of five years.

“During the past two years, although the company has been working to the limit of the capacity permitted by the available financial resources, it has had to refuse a considerable amount of business. In consequence of the substantial amount of additional working capital resulting from your subscription of ‘A’ Ordinary Shares, we have already put in hand considerable extensions to our buildings and plant which will enable us to handle a greatly increased output. At the present time the amount of our turnover is limited only by our productive capacity and with the established reputation which the business holds in the engineering trade, my co-Directors and I can only express our complete confidence in its future.”
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