The Daily Telegraph from London, Greater London, England • 19

The Daily Telegraph Friday July 15 19S3 33 I and now wants to sell envirotx i 1YTR PAUL VOLCKER re-estab- CITY COMMENT mental health care and biotech INVESTMENT BUSINESS Hi -s tl act SM Vftf Tfr'r nsnea nis psycuuiujiiudi ascendancy over the United States Senate yesterday by warning he would not necessarily stay for a full second four-year term in the job of chairman of the Federal Reserve Board whioh he waited so City warms to Thorn-EMFs £122m pre-tax By TOM KYTE The Volcker sound pleases Wall St fans anxiously to retain The Senate in turn deferred a vote approving his second term until next week when he has addressed the full -fOi few City Editor Andreas Whittam Smith Congressional committees But his re-election is now a formality however and the financial community which campaigned so suc -t nology products but its real pioneering achievement is being the first company tailored to exploit the Business Expansion Scheme one of the uncontentious aspects of the Budget which became law under the original Finance Act Laing are offering one million Dutom shares at 115p each to: finance Dutom's growth but thl Business Expansion Scheme allows investors to offset the subscriptiotp price against their top rate of income tax So a 75 pc taxpayer applying for the minimum lOQQi shares would effectively pay only £290 or 29p per share rather than £1150 Dutom is not planning to pay dividends yet but buying at a quarter the price obviously quadruples the ultimate yield And because capital gains tax is based on the gross subscription price: the shares can rise 300 pc before the top-rate taxpayer faces a capital gains tax liability cessfully tor his reappointment last month takes it for granted THORN EMI knocked all to £33-3 million while United City forecasts for six yester- Kingdom profits including that Mr Volcker will stav on at least until after the next Presiden day with full year profits to gamea p-c- lo finr million March 31 up from tial election and probably well after that if the Republicans are fioo Commenting on this aspect million pre-tax to nrt illiAn re-elected chairman Sir Richard Cave Daily Telegraph City Office 112 Queen Victoria Street London EC4P4BS Tel: 01 -353 4242 Mr Volcker himself was careful This sent the shares 42o features of the vear's trading to play down the significance of se iff higher to 554p by the close as was the severe downturn over-most market analysts upgraded seas which stemmed largely their estimates for the current from the recession in the his testimony but Wall Street went better again initially at least year United States But a further on me generalisations ne went on to produce The Fed has been The final dividend has been factor was the substantial raised from 10-575p net to start-up costs of overseas video ll-70p bringing the total up software activities" slightly more restrictive with -si- Dutom is likely to be the first a money supply recently something which the markets have been to J5-75p for an overall Sir Richard added: "We of a series of new issues ing the tax benefits to the private increase of 7-7 pc over the have maintained a policy of previous year investing in the home enter- reasonably clear on as rates have hardened He matched this indication of toughness with the claim The full year increase In tainment and high technology 1 proms renects a strong second uuMnesies in nome enrenain-half upsurge in profits follow- ment we responded to the that restoring the precise pattern or money supply growth for the year as a whole to the 4 pc to 8 141 investor tneretore The Business Expansion Scheme is the new improved wersion of the Business Start-up Scheme of course but the new improvements do mean that the tax benefits apply to all the shares not only half and that the maximum tax relief available to each investor is now £40000 pc target range isn necessarily ing an interim slump from strong demand throughout the £45-5 million before tax to vear for video cassette record- £27-5 million ers by continuing to invest The recovery stems from heaviJy in retail equipment improvements in most of the engineering we created company's key divisions Con- information technology a priority a delphic remark which may mean the target is important but the recent hump in the figures is not sumer electronics hoisted profits division to co-ordinate our from £72-8 million to £84-7 interests in this field and to tii The authorities successfully financed £850 million of the borrowing requirement by selling government debt to the non-bank public and the resulting calls on bank finance added only £100 million seasonally adjusted to the money supply appreciably less than the experts had forecast It is possible to argue that could have been a minus figure if the public sector actually spent less as well as borrowing more But while the public sector seems to have been prudently financed the level of bank lending to the private sector rose by £1570 million seasonally adjusted in the four-week period 50 pc more than in the same period a year ago and a figure exceeded only twice last year in banking September and October The clearing banks last week estimated their own lending had risen by £880 million and it now appears that the non-clearing banks had also been active lenders advancing £700 million which feeds straight into the money supply If the trend continues encouraged by last month's base rate cut and the urge to run down in savings the authorities will have to redouble their efforts to mop up money simply to offset bank lending And we do not need Mr Volcker or Mr Lawson to tell us that could lead to higher interest rates however inappropriate to the need for economic growth Investments at a discount ANYONE offering quarter-price investments stands- likely to receive a friendly reception in the City but that is exactly what brokers Laing Cruickshank are offering with the shares of Dutom Meditech Dutom has researched available for private borrowing and industrial investment and the high interest rates it involves attract foreign capital into the United States forcing up the dollar putting American industry in a weak competitive position and widening the current account deficit That is reasonable text book stuff these days But the least reassuring part of Mr Volcker's analysis is that the growth of the economy will not generate extra tax revenues fast enough to solve the problem He still forecasts a $100 billion shortfall which is immune to an upturn Bank lending the culprit DETAILED figures on the money supply yesterday confirmed the estimates made with the banking figures last week In the four weeks to June 15 sterling M3 rose by £1610 million or 1-7 pc the narrower definition Ml rose by 1-7 pc and the widest definition PSL2 which includes building society deposits rose by 1-1 pc bringing the annual rates for the current target period so far up to 15-8 pc for M3 17-9 pc for Ml and 17-6 pc for PSL2 All three figures are well above target and they are too close together to argue that any one of them is being artificially inflated by special factors But the detailed figures tend to show that the villain of the piece last month was not the public sector borrowing requirement but bank lending The central government borrowing requirement during the four-week period was £1290 million but much of this was due to borrowing to onlend to local authorities and public corporations which reduced their own direct borrowings by £340 million On interest rates he was equally But nobody still less the tax- 'jfi million while engineering provide a better platform for even-handed If the reduction in Imps holds interim down A MERELY maintained interim dividend disappointed followers of Imperial Group yesterday as did the chairman's statement that profits would increase by more than inflation over the full year A more positive statement had been expected Interim profits are up 20 pc from- £05 to £79- lm which the board views as a satisfactory outcome with Britain and the United States experiencing economic difficulties and with selling prices and volumes remaining under pressure The interim dividend of 2-75p a share will be paid November 1 Questor P22 Distillers warning DISTILLERS Company the Scottish whisky group exceeded market expectations with pre-tax profits of £200 -8m for the year ended March 31 compared with £178 -2m but dampened enthusiasm by warning that profits are inflation rates is maintained then profits leapt from £19-6 mil- growrn we nave expanded lion to £28 million and broadened the base of the Domestic alliances increased electronics business" man offers something for nothing and the main drawback of buying shares under the new scheme is that they must be held for at least long-term interest rates will come down over a period of time which its contribution from £20-9 mil- The year-end balance sheet linn to £25-2 million while a shows borrowings up from £244 is the kind of academic remark foreshadowed earlier in the million net to £292 million vear the lijrhtin? interest which takes up net gearing level which gives very few hostages to fortune Inflation has come down made up considerable ground UP from 40 P-c- of shareholders' because of the recession and the fall in commodity prices and wage with a recovery from £900000 funds t0 48-3 P-c- But ross to £9-8 million cashflow still increased from Only area which caused a £298 million to £358 million settlements and it is anybody hve years to secure the full tax benefits Companies like Dutom are not for wheeler-dealers The other main restrictions are that the companies must be British operating mainly in Britain That's not surprising given the objective of reviving the domestic economy through new businesses But it is also a rule that the company cannot obtain a guess how fast they will rally if economic activity continues to revive strongly mi drag on the performance was Below the pre-tax line the music where profits slipped company has charged £25-6 from £36-6 million to £21 mil- million (last year £5-6 million) hon Even films videos and cf extraordinary items relating software which remained in largely to a provision against the red saw a reduction in tne susppnsjon of the planned losses from £10 million to £4-5 Iaunch of the companys video More ominous was his reminder of his continuing concern over the not likely to be maintained this disc project This is not ex- size of the federal deficit and a warning that the current rapid rate of economic expansion is hastening the day when monetary year Group turnover rose from £108bn to £113bn Stock Exchange full listing of quotation on the unlisted market for three years from issuing the shares But that isn't to say that the 4- 1 IT1 if-J frm tviL miiiinn tn pat- pected to be repeated in the million current year One of the most striking fea- The overall outlook for 1983- policy (his department) comes into conflict with large budget tures of the full vear figures 84 remains bright and most city In line with earlier indications about narrowing the gap between interim and final dividends the year's final payment eases from 8-75p to 8-5p a share payable October 7 though the year's total payment rises from ll-75p to 13p deficits (ultimately the President's was the fact that all of the pundits are now pitching for increase was achieved in the pre-tax profits for the current United Kingdom Overseas year to rise to something close responsibility) The current high level of the barred from the official markets Dutom and its successors can seek listings in Luxembourg Wall Street or any over-the-counter market profits pre-mterest fell by 37p to £165 million a snare Questor P22 federal deficit means there is iiii already relatively little credit World Bank EUROFERRIES APPOINTS SIDDLE AS CHAIRMAN Stakis buys a Grand Met hotel for £65m By BRUCE KINLOCH bis uue 886 Company News and Money Markets P20 Questor Column and Commodities P22 Unit Trust Prices P23 £100m Eurobond THE World Bank which provides finance for third world countries took advantage yesterday of a firm pound and STAKIS is paying Grand Metro- 17 hotels in London and the politan £6-5 million for the Pan Am deal added two more 244-bedroom St Ermin's Hotel As an international chain with Westminster and the 36000 sq hotels in every European more buoyant financial markets Steel output down by 6pc STEEL production slipped last month and despite signs of recovery output in the first six months was still running below last year's comparable levels Holidays at both British Steel and private sector works was blamed for the 6 pc fall in production from the May levels: to 294900 tonnes a week But output in the month was running 51 pc above the same period last year Production in the first six months averaged 298700 tonnes a week 3-9 pc down on the 310800 tonnes average recorded a year ago Dow springs above 1200 WALL STREET traders rallied Mr Volcker said the Fed had yesterday after receiving some been slightly less accommo- reassurance from Federal Re- dative in the past month but serve Board chairman Paul he added that it was not plac- Volcker that central bank ing great emphasis on the swol- policy is on an even track len money supply measure The Dow Jones Average of It was the hul8e in the M-l 30 Industrials rose 6-51 to that provoked a market slide close at 1204-33 Advances led in the Past week declines three to two on the The Commerce Department New York Stock Exchange reported that business mven- Volume swelled to 83-50 mil- tones rose 0-3 pc or $1-69 lion shares from 68-90 million billion in May following a on Wednesday similar increase the previous Speaking before legislators month Commerce Department on Capitol Hill Mr Volcker officials added that business offered a positive though un- sales in May increased 3-3 pc specific forecast that long-term after rising 1 pc in April rates were inevitably headed Sterling in New York down now that United States closed ait $1-5230 against inflation is firmly in check $1-5295 to raise £100 million through a Eurosterling bond issue tt ot adjoining omce and com- country the group found it was mercial properties The total top heavy in London and the consideration will be paid in recent sales reflect an attempt The bonds will run for five cash on completion on July 18 to balance the situation years and will carry an interest This is the second major In January 1982 Grand Metro-hotel sale in London by Grand politan sold 26 of its County Metropolitan this month Last Hotels to Queen's Moat Houses rate of ll's pc They are to be issued at a price of £99J2 for every £100 nominal of Gold fluctuates THE London sold price closed 50 cents higher at S426 an ounce yesterday after a relatively quiet start Initially the gold price fell below its previous overnight levels and touched a day's low of £423-75 before renewed interest encouraged a rally Nolton stake ANDREW Millar of Airship Industries has bought a 24-5 pc stake on his own account in the small industrial holding company Nolton causing Nolton's shares to rise front 30p to 7 Op yesterday The aim is to inject three small companies in which Mr Millar has an interest into Nolton and he also plans a major share placing and rights issue stock to improve the yield week it sold the leasehold of tor around £30 million i-iTfi no i -j Lead manager of the issue Reo Stakis chairman has ZTh ti? Gosvenor been looking for a major SffJEL hJL- £Tea" London hotel to add to the is Baring Brothers the London-based merchant bank TO puuuu uro group's chain of hotels and inns MS 81 i 4c uu uuwu in Tn the vear t0 October 5 a 1982 the Stakis hotel and inn policy of reducing its stake divisjon saw an increase major London hotels followng cia a 1 Ul ll) 11 JJ I I II I 1 I 1 1 I lif 10 UUSt It whie Profits improved by 36 it AT 1 a- iiic upeiduon or inrer- to £3 2 million The continental Hotels Corporation -riritnn ookioUj EUROPEAN Ferries the ship Without Callog vour business telephone ping and property group yes Reuter study rfJnan American Airways London hotel such as St Ermin's tor million should enhance the division's terday ended speculation about 014 a successor to Keith Wicken orand Metropolitan owned profitability den killed in a weekend air crash as chairman and decided against going outside for a rt replacement The new chairman is Kenneth Maritime forum tours Far Elast mustbea Siddle 47 present managing management director (above) He will com fit roi bine both jobs at least for the time being A statement from BANKERS and shipowners will the company emphasised that NEWS agency Reuters has asked its auditors to prepare a study on whether to raise further cash through a share issue as part of an examination of the company's financial structure managing director Glen Renfrew said decision is to be taken until the report is ready later this year he added National newspapers own 41 pc of Reuters and the Press Association another 41 pc Talks have almost reached agreement on a stock market quotation for Reuters shares this autumn which is expected to put a price of some £lb to £l-5b on the 130 year old venture Last year Reuters made a profit of £36-5m more than double the 1981 level De in an international maritime the appointment was unani bit like this ndustnes torum team leavine mous ths weekend tor i two-week Mr Siddle like Mr Wicken visit to China Hongkong South den an accountant by training Korea and Japan joined the company in 1960 The forum also inrlndps nil when it was known as George Telephone systems no matter how Nott Industries and became companies All are working to Study starts into services industry A STUDY of the barriers limiting trade in services was launched yesterday by Mr Channon trade Minister in the build-up to international discussions on liberalisation Mr Channon wants comments from the banking insurance shipping civil aviation consultancy computer and other service sectors by October 7 He said The British Government for some years now has been promoting action designed to free trade in the services sector The study follows a contentious discussion at the November meeting of the General Agreement on Tariffs and Trade the world trade referee" an managing director in 1972 when Mr Wickenden took over as gether to try to find a solution to the world shipping and ship chairman atr ST All you get is a one line invoice building crisis Yesterday's board meeting The delegation will be led also resulted in the appoint- Jim Davis a director of the ment of two new directors Kleinwort Benson merchant from Noramco Holdings the rr company biggest shareholder We have had recent discus- with a 12 6 pc stake They are It's not ideal for cost analysis neither are many of the other forms available But now Callog give you the solution Yon receive a' monthly analysis A detailed breakdown of your business calls By department by line by individual extension sions with many European John Dick 45 chairman governments but the attention and William Pauls 37 presi WORLD MARKETS AMSTERDAM BRUSSELS CeB' 1-20 '28 HdS0CKONCbank) 40 UP 6 40 I Hang Seng) 1064 -73 up 38-18 PARIS (CAC General! Closed SYDNEY (All Ordinaries) 623-40 up 1-60 TOKYO (Nikkei DJi 8884-98 up 1-38 ZURICH (Credit Suisse) 286-40 down 1-60 of the maritime world remains dent of the US property on the Far East" said Mr concern which can build up its Davis We attach great impor- holding to 20 pc under a com tance to this visit 1 plex formula Alexander takeover talks off By MICHAEL BECKET US RATES Federal funds 9'4 pc (92) Treas 3 month bills pc Long bonds $905 ($9030) You see precisely where the moneys being and where the money can-be saved Over 1000 companies are already saving up to 40 on their telephone costs with Callog Being like this may be great fun but its no way to run a business A TAKEOVER approach for with greater career opportuni- chase a series of scandals has Alexander Alexander ser- ties and should enhance client been uncovered at Lloyd vices Inc the world's second service" which has been one of the largest insurance broker has factors denting Alexander's failed without producing a bid recent financial performance One company which has in the past debated taking Alexander over is Britain's largest US COMMODITIES Comex Gold: Jly 420-7 (424-6) Aug 422-3 (426-5) Sept 425-9 1430-2) Oct 429-7 (434-0) Dec 437-2 -(441-6) Feb 444-9 (449-4) Apl 452-7 (457-3) Jnfi 460-7 (465-4) Aug 469-0 (473-9) Oct 477-4 (482-5) Dec 485-9 (491-3) l-eb At May's general meeting insurance broker Sedgwick Mr Bogardus told shareholders Alexander had asked for a temporary suspension of its share quotation but after talks Group Talks were restarted Alexander had exDerienced earlier this year but came to the most difficult vear in our late into Wednesday even Jiiiiiii historv" Pre-tax profit last failed to produce norning ana in reDruary Dotn year dropped to $48-5 million ing had agreement called off negotiations were companies aeniea tney were in bid talks against $108 million in 1981 I cauoG vj xt erttrwirk vpsternav nsert nicAnuuci is sun hviiik lu ic sssl HHk i YrtSSErtaf WU1 resS up wUd pits va cover 167 rata llllllll from the Howden acquisition Other major financial groups have been showing an interest in Alexander of which the in London today ot minion on uie company A bid for Alexander would have Jack Bogardus Alexander t0 bein the $750 miiiion range chairman said the company (£490 million) Market specula-was being approached frequent- tion said the deal Sedgwick aa ouu-Z) Apl 503-5 (509 2) Chicago 1mm Gold Sept 425-7 429-8) Dec 437 1 (441-2) Mel) 448 9 (453 O) Jne 461-0 (465-1) SILVER: July 1190-5 (1222-3) Aug 1194-0 (1227-3) Sept 1205-0 (1238-0) Dec 1237 0 (1271-2) Jan 1248 0 (1282-7) March 1270 0 (1305-7) May 1292 0 (1328-7) July 113140 il 351-7) Sept 1336 0 (1374-7) Dec 1369-0 (1409-7) Jan 1380 0 (1421-4) March 1402 0 (1444-9) May 1424 0 (1468-4) COPPER: Jly 75-30 (75) Aug 75-70 (75-45) Sep 76-40 (76-15) Dec 78-45 (78-20) Jan 79-05 (78'80) Mch 80-30 (80-O5) May 81-50 (81-25) Jly 82-70 (82-45) Kep 83 -90 (83-65) Dec 85-70 (85-45) Jan 86-30 (86-05) Me 87-50 (87-25) May 88-70 (88-45) CHICAGO Wheat: July 339 '4 (3374) Snt 349' (348 '4) Dec 365'j (364w) March (373' (373ij) May 375 (375'4) July 363'a (365) COCOA: Jly 1950 (1990) Sep 1999 (2008) Dec 2067 (2078) Mch 2098 (2112) May 2114 12-126) Jly 2-126 (2 132) Sep 2-140 (2139) Dec 2 160 (2149) CHICAGO: Soyabeans July 632'a (S34'j Aug 635'a (639) Sept 643' (647) Nov 660 (664'4 Jan 673'j (6774) March 687 (692) May 697'2 (702'2) July 706'2 (710) Aug 705'j (708'j)" giant United States bank COUNTS THE COST OP EVSRV CALL Callog limited ISfcuntbarrow House Elizabeth Street London SW1W 9RB Telephone: 01-730 9056 iy doom potential oners dui so offered was for an exchange of Citicorp is said to be one The inem nao managea shares but it could not reach an United States financial services market has been volatile APPftflVtn fnr nci uuith talprnmmimirBttanje uetomc ritn hw Rritkh TotommmiinirahmK recently as companies have tried to spread the range of i i 1New agreement York dealings started again yesterday the share price drop- Two years ago talks between ped to $233 Sedgwick and Alexander were well advanced but are said to In London the Suspension have fonndprpd nn whr wac in accordance with conditions in the instructions for use services provided American Express is another price was £1558 Mr Bogardus to head the company though company with which talks have said mNew York that Alexan- they also blamed funda- been started but it opted Vfe need to control business telephone calls please send me details of the Callog service Our current telephone cost is pa Callog Liniited Mountbarrow Hcase Elizabetli Street London SWl 9RB Telephone: 01-730 9056 instead to buy earlier this if (HI I aer was not raiKing seriously mental differences between to anybody and does not m- United States and United icuu iu iu uic liimicuwie nm tax svrtpm ae a future" problem veek Alleghany Corporation the financial services group for more than $1 billion Alexander refused to name its latest suitor but said the NAML position He has in the past fended off It was that failure to agree that led Alexander tn a swift ACTUARIES INDICES DATA ST RE A MS estimate of the Financial Timet Actuaries All-Share index unavailable yesterday due to industrial action was 436-82 up 5-82 points COMPANY approacnes Dy saying tne requirements were that a bid acquisition of "OT4 Alexander talks had been terminated and the Llovd's would not be restarted Sedg should be beneficial to share Howden Group wick refused to comment holders should provide staff broker Following the pur-.