PORTFOLIO
Holding on
JOHN BULL
It is just over two years since I started my portfolio. At the time the Financial Times ordinary share index was standing at 390, which is where it stands today. In the interim there has been a great bull market (which took the index up by 33+ per cent to 521) and a great bear market (we've been down to 357.4). I have come out with a gain before expenses of 14 per cent, which is satisfactory. With the disposal of shares in Ernest Scragg a few weeks ago, I hope I have extinguished any weak spots in my list. I have still got quite an amount of cash, but these are not the days for out and out buying of equities. Investment managers for the big institutions ire, I find, neutral to modestly bullish about equities. As for interest rates, the consensus is that for the next six months they are either flat or tending upwards. Meantime, I am holding on to all the shares in my portfolio. Empire Stores: All the mail order groups seem to have slowed down this year. Em- pire's sales, which were up 27+ per cent in 1968, were only up by 9+ per cent in the first six months of the current year with profits ahead by a slightly smaller margin. We are into the peak selling period now with ex- pectations of a 15 per cent sales increase and profits to match. I am hoping for 1969-70 profits of £2.1 million before tax and I am prepared to hold the shares on this basis. Phoenix Assurance: Latest figures from Phoenix show a slight decline in its American results (thanks to hurricane Camille) but nothing serious.
Clarkson (Engineers): Clarkson has always had a much better profits record than the general engineering sector of which it is part. This is explained partly by good manage- ment and partly by its range (milling chucks Valuations at 22 November 100 Empire Stores at 61s Od £305 125 Phoenix- Assurance at 34s ... £212 500 Clarkson (Engineers) at 19s ... £475 1,000 Associated British Foods at lOs 31d £515 133 Lyons 'A' at 82s £545 200 British and Commonwealth Shipping at 32s 9d £327 200 Forte's Holdings at 54s 6d ... £545 200 Bowater at 53s 6d £535 £3.000 Savings 1965-75 at £76 ... £2,280 600 Pillar Holdings at 17s 6d ... £525 15 Kaiser Steel at £36 8s. £546 100 British Petroleum at 111s ... £555 100 Burmah Oil at 79s 3d £396 600 General Accident at 20s ... £600 Cash in hand £3,069 £11.430 Deduct: expenses £506 Total £10,924 Starting capital £10,000 Profit 2924 and cutters). But its latest figures (profits up 131 per cent) showed that the recent acquisi- tion of Tap and Die is already beginning to pay off. The shares have been fairly strong recently, as I think they deserve to be. They are certainly a hold at present levels, possibly even a buy.
Associated British Foods: This is an under- rated blue chip of the food business (Fine Fare is part of the group). I shall be surprised if the next results do not show another sig- nificant rise in profits.
J. I.yons: The shares have been a particularly firm market recently. I bought the shares on the grounds that a sleepy giant was waking up. So far so good.
British and Commonwealth Shipping: British and Commonwealth's latest figures are dis- appointing, with profits down from £4.9 mil- lion to £3.25 million pre-tax and a forecast for the whole year of £7.5 million against £8.3 million. The group's devaluation bonus has been eroded. In any case the Indian run has produced poorer results and containerisa- tion is still in the stage of providing head- aches rather than profits. But luckily the group's important air subsidiary, British United Airways, seems to be turning out a profitable acquisition.
Forte's Holdings: Mr Charles Forte's formula —the core of the business is hotels all over the world, plus aircraft catering, plus travel agents—is beginning to pay off handsomely. Last week's interim profits figures showed an increase from just over £4 million to £6.19 million, of which only £338,000 came from the newly acquired Skyways Hotels group. Forte's is one of the four major hotel groups, with Trust Houses, Grand Metropolitan Hotels and Lyons. Mr Forte is making a success of the George V, Plaza-Ath6n6e and Tremoille in Paris. 1 would like to see him buy the Savoy group in London.
Bowater: The trade cycle is right for the international newsprint manufacturers. Bowater's profits should soon move forward substantially.
Savings 3 per cent 1965-75: This stock pro- vides a grossed up return for standard tax payers of £11 l6s per cent. It has risen two points since I bought it. But for the time being the steam has gone out of the gilt-edged market.
Pillar Holdings: The share price seems to have got stuck. Recent profit figures have been good and there is always a chance of a hid from RTZ. I await the next announce- ment with interest and slight nervousness. Kaiser Steel: This remains an attractive way into the Australian iron ore producer, Hamersley.
British Petroleum: The shares recovered slightly on the news that the merger with the American company, Standard Oil of Ohio, was to be allowed to go through. But shareholders must now expect a long haul as the group's Alaskan interests are built up. Meanwhile there is hound to be some profit taking.
Burmah Oil: Burmah. which owns almost one quarter of BP's equity, runs in parallel with RP in the stock market. Burmah has recently acquired some important interests in petroleum additives from Monsanto. General Accident: In the few weeks since I bought them, the shares have appreciated by 2s. 6d. to 20s. These shares are a definite hold.
Previous page
