Times change
JOHN BULL
Many readers of the Times must have found the item which appeared last week head- lined 'The Times: a statement' incompre- hensible. It concerned what was called 'an internal financial arrangement' and described how the losses of the Times would be shifted from the Thomson Organisation to Thomson Scottish Associates. Two questions need an answer: who now owns the Times news- paper? who now owns Printing House Square, where the paper is written and printed?
On the first question the statement pro- vides a number of clues but not a solution. Under the new arrangement, it is said the Times will be published by Times News- papers as agents for Thomson Scottish Associates under an agreement which is sub- ject to annual review and under which Thomson Scottish Associates will pay the costs of operating the Times and will receive all income from such operations. Well, I don't see how Times Newspapers can act as agents for an operation which it actually owns. It seems to me that ownership of the Times has now passed from the Thomson Organisation, a public company of which Times Newspapers is a subsidiary, to Scottish Thomson Associates, a private company owned by Lord Thomson and his family. I am sorry that the parties concerned have not come out and said what is really hap- pening.
The fate of the property is particularly interesting. Printing House Square has multiplied in value over the past three years with the sharp rise in City of London rents. My property friends tell me that Printing House Square is now worth £10 million or so, which is about double the figure being talked about three years ago when Lord Thomson came onto the scene. One must presume that he Thomson Organisation still owns the building, which means that share- holders have not done so badly as they think out of the Times. The rise in the value of the building is almost equivalent to the accumu- lated losses of the paper. And although, on strict arithmetic, Thomson Organisation shareholders do not gain much from the latest deal because the dividend waivers which Thomson family interests will now give up are nearly as great as the Times's losses, they should heave a sigh of relief all the same. The chances of Thomson Organi- sation becoming the 'Pc of the 1970s, a stumbling, unprofitable giant, are rather less now than they were.
The Investors Overseas Services affair is rising above room temperature again. Bern- ard Cornfeld, the founder, is trying to regain control of the company. Meanwhile the company has partially suspended redemp- tions of its best-known fund, Fund of Funds.
The latter is a serious enough development. It represents one of the few cases since the war when shareholders in a unit trust have found themselves unable to get all their mpney out. In this case the trust is a dollar fund and few British residents have holdings in it. In a curious way the toils of los seem to matter less and less. Of course, if anything occurs to set off a flood of redemptions, the impact upon world security markets could be unpleasant. But that-seems unlikely. The group is disintegrating slowly. And the finan- cial community does not seem to care any more.
The days when this or that large bank was on the brink of rescuing los from its troubles have long since disappeared. The sales force is fast disappearing. All that is left are some not very attractive products and the demoralised rump of the staff. Sir Eric Wyndham White, the new chairman, labours on, but as far as your City banker is concerned, it's a bore.
It is far too soon to translate the ceasefire in the Middle East into a date for the re-opening
of the Suez Canal and the consequent impact upon tanker rates—except that this is pre- cisely what the men in the oil companies are doing now. As Shell's good results showed—and as I expect BP'S less than good figures will show—tanker rates are a crucial element in oil company earnings. If the ceasefire does begin to turn into some- thing more durable than a ninety-day pause. then the key points for the oil companies are as follows. It is estimated that it would actually take four months to clear the Canal ready for use, but it is possible that the Canal authorities might in the early stages only do enough to allow small ships through, that is to say excluding the big tankers. If the Canal is open again to big ships, however, the downwards pressure on rates will be terrific.
ffolkes's investors' alphabet
D is for Dividend
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