Portfolio
Scope from Stoddard
,Nephew Wilde
In Japan because of the high mercury content in fish, people have fast begun to change their diets. And so alarmed are the government that the cabinet has been told to eat fish in order to placate the alarmists. In New Zealand with feelings running high against the French atom bomb, the Prime Minister ordered a cabinet minister to be aboard the ship sent to the testing area. I mention these instances because in Britain politicians appear to be getting increasingly out of touch with reality and there was no finer example of this than Mr Heath's statement the other day denying that prices had risen dramatically during his term of office. If anyone in the cabinet even remotely enjoyed a near-average standard of living then we might have a little more accuracy over the emotive question of the cost of living. Whitehall seems as ill-informed on this topic as it does about the City and its financial institutions.
These ideological thoughts have been foremost in my mind and tend to give me a jaundiced view about the general state of the economy. In fact, along with others I am viev-ing the investment scene with growing scepticism. Yet my broker, Woth
erspool, managed to raise a flicker of interest when he suggested I take a look at Stoddard Holdings.
This is a carpet company that has begun to emerge from a particularly bad trading patch, with losses of £681,000 and £687,000 respectively recorded in the years 1970 and 1971. In 1972 pre-tax profits were £467,000 on turnover of £8.2 million, but the outlook is much brighter. Various estimates have been made and in some quarters it is thought that profits will exceed E2.7 million by 1974. The other point that puts 'Stoddard in an advantageous position is that it has big tax losses available Finances are fairly healthy and the asset backing could be as much as 150p taking present day property valuations. Apart from trading there has been talk about rationalisation of the carpet industry and this is one reason why 1 hold another carpet share in my portfolio (Carpets International). However Stoddard is controlled and terms considerably above the present share price would be needed to see a successful bid emerge. Still selling at only five times earnings 1 am quite sure the shares have a lot of scope. I am selling Baker-Perkins to finance this purchase.
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