Buying into a minority
Nephew Wilde
"Periods of uncertainty produce the most irrational behaviour," was one of my broker Wotherspool's more dogmatic statements of late.
At the time I thought he was only referring to the way in which shares had been so indiscriminately marked down but further reflection leads me to appreciate Wotherspool's comment in a broader context. On the union front for instance, I have considerable sympathy for those with whom the threat of redundancy is ever present. Like the miners the railwaymen now faced with the axe must feel there is little to lose in striking for more pay.
On this whole question of the railways I never fail to be amazed at successive governments' policies. We can sacrifice millions on Concorde, congest our roads, but spend small amounts on train services. Now I suppose that, Lord Beeching was only a Government stooge and had little to do With long-term planning, so in a way he performed his surgeon's task as expediently as possible. And it was pointed out to me the other day that a man of his calibre would do a lot for Furness Withy which he now chairs. I looked at this as a possible investment situation but it hardly struck me as exciting enough for my portfolio. However, what I did discover was that Furness has a majority stake in Manchester Liners and It could well do a tidying-up operation and buy out the minority.
As for timing, in my opinion Furness will move sooner rather than later, for Manchester shares are now depressed following the poor interim report. This showed losses of £516,000 against £439,000 for the same period last year and a deficit for the year of £422,000.
This poor result was largely due to the St Lawrence longshoremen's strike which closed the, container terminal and was estimated to cost £760,000. In the final half the impact of the longshoremen's action will be felt less severely but the fourweek UK dock strike will affect results. As the chairman has summed up the situation, " containers are the whipping boy for the reduction of dock-yard jobs."
So this year at least the prospects are that a deficit will be incurred. Yet it is not too much to hope for a return to better times and three years ago Manchester earned over £1 million — and, needless to say, it pays very little tax. Also the group is expansion minded and recently bought a road haulage company with a fleet of 300 vehicles.
Fortunately I do not have to sell anything to finance this purchase as I have cash in hand.
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