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Aviation History
1957
1957 - 1891.PDF
27 December 1957 979 ON BALANCE By M. DUFFY A RETROSPECTIVE study of the aircraft industry of thiscountry, and of the industries closely associated with it,shows how great has been the rate of expansion since various well-known companies were first registered. To beginby going some way back into the industry's history, it may be remarked that 1935 was an especially significant date in aviation-industry finance, as it saw the registrations of both the Bristol Aeroplane Company and of the present Hawker Siddeley Group.The Bristol Aeroplane Company was first incorporated in 1910. In 1921 it acquired the business at Filton, Bristol, of the Britishand Colonial Aeroplane Company. In the same year it started the design and the production of aero engines. At that time itwas stated that the total number of workpeople and staff employed exceeded 4,200. Buildings, comprising the company'sworks, offices, etc., covered an area of upwards of thirteen acres, exclusive of the Filton Aerodrome. Trading profits for some years past have been steadily on theup-grade, as the figure for 1956 was returned at the new high level of a shade over £4,000,000. This compared with £3,392,000for 1955 and £2,918,000 for 1954. The chairman's speech for 1956 stated that it was evident that the number of new aircraftprojects undertaken in this country would be fewer. The com- petition to secure them was consequently envisaged as beingkeener; further, the proportion of business related to civil and military transport aircraft, as distinct from combat types, wouldbe greater than in the past. They considered themselves, how- ever, well placed to secure a good share of such work and carryit out effectively. Hawker Siddeley Group (formerly Hawker Siddeley Aircraft)was formed to acquire the whole of the issued Ordinary capital of the Armstrong Siddeley Development Corporation and half of theissued Ordinary capital of Hawker Aircraft. This concern's for- tunes of recent years have followed the same lines as those of theBristol company, as group profit for the year ended July 1957 was returned at the new high level of £20,500,000, against about£17,000,000 for 1956, £15,700,000 for 1955, £11,400,000 for 1954 and £7,900,000 for 1953. City comment on the figure for 1957 wason the lines that none of the acquisitions made this year, notably the Brush group and Dominion Steel, would have affected, exceptto a very minor extent, the latest figures issued. It was also suggested that as only about £1,000,000 of thelatest increase is traceable to the A. V. Roe Canada subsidiary it followed that the bulk derived from the group's operations in thiscountry, which was considered an exceDent result. The picture was, perhaps, slightly marred by the rise in depreciation from£3,930,000 to £6,340,000 and by the new item of special develop- ment expenditure of £2,130,000. A final point made was that thefirm had a big programme of development and research so that the special development expenditure should be regarded more as acapital item. Rolls-Royce is noteworthy in that foreign holders have novoting rights, and also because its trading profk. trend for some years past has been on parallel lines, as this figure for 1956was returned at the new high level of £7,598,000. The corres- ponding figure for 1955 was £5,900,000 and those for 1954 and1953 £6,631,000 and £4,000,000-odd respectively. Shareholders were informed that during 1956 the factory output, as well asorders taken, had reached record figures, and that group sales The Financial Progress of the Aircraft Industry totalled £80,000,000. This increased turnover, however, was notmatched by a corresponding increase in trading profits. The com- pany were having to expend substantial sums on the developmentof future products, particularly aero engines. In addition, they were having to make substantial payments to the Ministry ofSupply in respect of development expenditure incurred in past years. They were confident, however, that in due course theirpolicy would be reflected in still further increases in their business. A final point was that their backlog of firm orders stood at about£100,000,900. de Havilland Holdings, as will be seen from the table, is thelast of the four aircraft companies in it capitalized at over £10,000,000. Its trading profits trend over the past few years has,however, been on slightly different lines; although the figure for 1956 was returned at the new high level of £5,500,000, against£3,900,000 for 1955, the corresponding total for 1954 was shown as only £137,200 and that for 1953 as £3,920,000.The exceptionally low figure of £137,200 for 1954 was reached after providing the appreciable total of £4,732,000 for excep-r'onal losses arising in connection with Comet production. The striking recovery for the years 1955 and 1956 was noticed by aleading City commentator under the headline "de Havilland Resurgent." Points stressed were, first, that the results for 1956 showed howcompletely the Comet after-effects had been shaken off, and second, how they reflected the growth of the Canadian interests,as the separate figures published would appear to show that de Havilland of Canada accounted for something over 30 per centof the net profits, against the region of 10 per cent for the previous year. It was also indicated that the success of this interest wasdue at least in part to that subsidiary's specialist production of the Beaver and Otter. It was also emphasized that the beginning ofa decline in sales of Ghost and Goblin gas turbine engines would be offset by the new range of jet engines, the most important ofthese being the Gyron, further that the company was pursuing its development in spite of Government support having beenwithdrawn. Westland Aircraft, which had its origins as Petters, holdlicences to manufacture certain types of Sikorsky helicopters. The year 1957 was an important one in the company's history asit saw trading profits at a new high level, i.e., £1,307,000, com- pared with £1,152,000 for the year ended June 30. The chair-man said that following a further considerable increase in production, consolidated trading profit had risen compared withthe previous year. The sale of Westland helicopters and spares to customers other than the Ministry of Supply had increased byabout one-third as compared with previous years. Normalair, Ltd., and Westland Engineers, Ltd., had contributed to theyear's successful results. Profit had again been ascertained after writing-off private-venture expenditure, most important of whichduring the year had been in connection with the development of the Widgeon and Westminster helicopters. Development, addedthe chairman, must continue to absorb a large proportion of the company's earnings, and in view of the uncertainties and hazardsinherent in the aircraft industry, and the special national diffi- culties of the present time, it should be emphasized that noassurance could be given that the rate of dividend could neces- sarily be maintained in the future. Consolidated trading profits of Fairey Aviation for the yearended March 31, 1957, have also shown a new high level, i.e., £2,548,000 against £2,458,000. The company's chairman saidthat they had had another successful year, as shown by the con- solidated Group profit, but added that there had been somequite material variations in the sources of this profit. There had been a considerable increase in contributions made by overseassubsidiaries and by home activities other than those concerned with aircraft. This had offset the reduction in the sale of theirproducts to the British Government, due to the reduced pro- gramme of Gannet aircraft and other work for the Ministry ofSupply. The Board's policy of broadening its activities was con- tinuing to have its effect and, in consequence, total profit hadbeen maintained. Stock and work for 1957 was shown in the accompanying consolidated balance sheets as the appreciabletotal of £5,522,000, against £4,643,000. As will be seen from the table, this former figure is more than double the company'sauthorized capital. D. Napier and Son's trading profits figure for 1956, at£679,200, was a slight reaction from the 1955 total of £759,300, this latter also being a new high level and comparing with£587,800 for 1954 and £474,700 for 1953. The 1956 figure for stock and work of £5,872,000 is more than double the authorizedshare capital total, and compares with a trifle over £6,000,000 for 1955. The 1956 total for stock and work, however, was quali-
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