Market report
CUSTOS
The market remains cautious. Though the Financial Times index is some thirty points below its record level, that level was only reached for a brief and hectic moment. Just over 470 -was the highest range in which any large amount of business was done. So now, with the index marking time just over 450, it is thought to have more room to fall than to rise. If in fact there proves to be a floor under the market at 450, that would be a bull pointer.
Courtaulds sprung a surprise by bidding for Ashton Brothers, the £4 million Manchester textile firm. The Monopolies Commission has been trying to set limits to Courtaulds' empire- building; and the Board of Trade, which is con- sidering the Commission's report and also pre- paring its 'guidelines' on mergers and public policy, now has a poser to answer. Ashton is a self-sufficient group, vertically integrated—so many people's facile solution to Lancashire's troubles; it has not been saved from a decline in earnings. Although Courtaulds' bid is scarcely generous—at just sevenpence over Ashton's price before it was announced— shareholders will need a counter-bid if they are to do any better.
Rolls-Royce's preliminary figures were well received, putting the shares over 2s higher— they had drifted to 52s 9d. The final dividend is increased, to make a total of 11.385 per cent against 11 per cent paid last year and forecast for this. Total revenue rose from £171 million to £266 million, and pre-tax profits from £8.4 million to £11.8 million. The comparison is obscured by the inclusion of a full year's con- tribution from Bristol Aeroplane and Bristol Siddeley. The cloud over Rolls-Royce is still the cost of financing its order for the RB 211 air- bus engine. Interest charges have already risen from £2.3 million to £6.7 million, and there must be a danger that Rolls-Royce is in for a time of profitless prosperity.
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