Market report
• CUSTOS
Enjoying a short respite from ministerial pro- nouncements on the economy, the market is calmer. Last week's violent fluctuations left the Financial Times index just. over the 400 mark, and there for the first part of this week it remained, moving only narrowly.
Massive takeover bids continue. Though this week has seen nothing on the scale of the British Leyland merger, there is a £44 million hitt for Typhoo Tea from Schweppes—an exceptionally well-kept secret, this one. The bid, which has the Typhoo board's support, will alter Schweppes's character, greatly widening its interests in foods, improving its credit base, and making things more difficult for any bigger fish—Distillers is often mentioned—which flight think of swallowing the company.
Shareholders in Clutsom and Kemp (now (lutsom-Penn International) used to argue that they had a safety net: either the company would do well, or its major supplier Courtaulds would take it over. Both chances, in fact, have come Up. Courtaulds' bid, worth about 47s 9d, saw the shares rise 15s to 52s 6d. This implies hopes Of a counter-bid. But Courtaulds' huge mopping-up operations in the textile trade have been singularly free from counter-bids. ICI do riot want a direct stake: Du Pont has made no move, nor has the Dutch giant AKU: Viyella looks the obvious rival, but in fact clashes have been avoided. Quite often, though—as with the recent bid for R. and W. H. Symington—the defence has pushed Courtaulds a little higher. This may happen with Clutsom; but share- holders have had a good run, including those who had previously burned their fingers in Penn, now part of the group. At upwards of 52s (before falling back on profit-taking) they cannot be too far wrong to sell in the market.
Government stocks remain idle, with buyers holding off. They are still waiting to see what the Chancellor will do to control inflation. Mean- while the increase in the Canadian bank rate, up one point at 7 per cent, shows what may happen to international interest rates as more dollars are recalled to New York.
Company notes
Mr Harald" Peake's valedictory report from the chair of Lloyds Bank—he is handing over to Sir Reginald Verdon-Smith—covers, he says, the most difficult year that he can remember, with devaluation, tax innovations, various diffi- culties over payment of staff, and six changes of Bank rate. Most of the profit came from the parent bank's operations, but associated companies continue to increase their share of profit. The Unit trust has had a successful first year. 'The itate of the national economy, re- strictions 00 lending, and rising costs' have deterred the board from raising the dividend.
At the Westminster Bank Mr Duncan Stir- ling is content to call the year's events 'un- precedentedl: for his own bank they include the commissioning of a full survey from McKinsey's. He describes the dispute with NtIBE at some length; 'there is not, .and never was, any quarrel between this bank and its staff, with whom for over forty years we have nego- tiated by their majority wish through West- minster Bank Guild.' He looks ahead with caution, fearing a contraction in world trade.
In his report on Grand Metropolitan Hotels, Mr Maxwell Joseph draws attention to the tax charge--`disproportionately' increased by £358,000 on a pre-tax profit L583,000 higher —and to the cost of SET, which was /325,000. For this year the restrictions on American tourists must affect the group's hotels in Britain and in Paris. Mr Joseph predicts that diversification and the search for new markets should produce profits not less than last year's.
Colonel Terence Maxwell, chairman of International Computers and Tabulators, in a statement at the annual meeting confirmed reports that the company's computer interests might be merged with those of English Electric. Talks (he said) are in progress, with the Government taking part.
The Woolworth preliminary statement shows a fall of £1,935,771 (to £36,753,794) in the pre-tax profit. The tax charge is only £50,000 lower than last year, and the profit after tax falls to £21,089,770. The final dividend is main- tained at 144 percent.
The interim statement from Stapleveen Insurance Holdings forecasts that profit com- mission from the group's underwriting agencies 'is likely to be negligible' this year. The income from agency fees will rise, interest and invest- ment income is higher, and other income— mainly from insurance brokerage—rose in the first half-year by 10 per cent. These factors should at least offset the reduced profit from underwriting agencies. The interim dividend is maintained at 14 per cent.
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