THE CITY HAS FAIRED WELL UNDER HM THE QUEEN!

THE CITY HAS FAIRED WELL UNDER HM QUEEN ELIZABETH 11’s REIGN SINCE 1952- WHAT A FANTASTIC CONTRIBUTION TO UK WEALTH!

 On 6th February 1952 King George V1 died in his sleep.  As a mark of respect there was no television until the state funeral on 11th February.  I remember being incandescent with rage at missing the current episode of “Hopalong Cassidy!” My mother sent me to my room for my outrageous outburst.  I was seven years old!  Queen Elizabeth 11 has been the monarch for the UK and the Commonwealth since then – 63 years and 217 days, now longer than Queen Victoria who reigned from 1837 to 1901.


When Her Majesty came to the throne there were 30 constituent companies in the FTSE 30.  The FTSE 100 was not formed until 1984.  Only 5 companies from the FTSE 30 in 1952 are still quoted companies today – Imperial Tobacco, Rolls Royce, Tate & Lyle GKN (Guest Keen Nettlefold) and Coates. The rest have disappeared, been taken over both at home and abroad and have merged resources and assets with complimentary operations. Ironically there were no banks in the FTSE 30 – Midland, Westminster, Barclays and National Provincial were all relatively low-key operators.  BMC and Leyland were heady motor manufacturers in their day but Germany and Japan usurped the UK’s influence – better quality and more competitively priced.  It is very reassuring that the UK is now the number two European motor assembly country in Europe thanks to commitment from Nissan, Honda and BMW.

The dynamics of business, industry and commerce have changed unrecognisably in the last 60 years. On the brewing front, the product became so international with Carlsberg, Heineken, InBev and Anheuser Buschblazing the trail; so that Watney Combe Reid was never going to survive. Distillers became the backbone of Diageo.  Shipbuilding became a pastime of yesteryear as the aircraft ruled OK. Swan Hunter disappeared in to Vickers.  Vickers was eventually swept up like a damsel in distress Rolls Royce and Hawker Siddeley became naturally part of BAE Systems.

EMI – well technology and Apple put EMI to the sword.  Ask Guy Hands! Spillers were sold to Hillsdown Holdings, which was partly broken up with the residual becoming Premier Foods. Dear Old Lancashire Cotton – well the cotton & wool industry died with synthetic fibres being a much cheaper alternative – it was dissolved in to Courtaulds as was Pinchin Johnson.

Harrods went private before Mohamed Al Fayed bought it and sold it on to Qatar for circa £4 billion. P&O, just like Cunard, lost its importance as cruising took a back seat to the airlines. FW Woolworth – now there’s a rave from the grave. It just became out-dated and much of it was sold to the Foot Locker Group, with the residual balance going sadly in to liquidation. ICI ended up with just paint having been a premier chemical company in the 1950s and was acquired by Akzo Nobel as was Courtaulds.

My favourite company of the time was GE run brilliantly and ruthlessly by Lord Arnold Weinstock, who made me look left wing.  He held very few candles for the TUC and in one tough interview with, I think, Michael Charlton, he was ruthless as to why he kept £2 billion of gilts on his balance sheet rather than expand the company. His response was epic.  If I can earn a 12% coupon for my money why would I put it at risk at the hands of an irresponsible and unruly Trade Union movement?  Hard to argue at the time! Ironically GE became Marconi and Lord George Simpson watched its demise from the bridge!  How are the mighty fallen! 

 

 

As it happens though the FTSE 30 and 100 have been great investments up until the end of the last century. It is hard to quantify the contribution the monarch has made to the wealth of the UK, but it is very considerable.  They have been a disaster since January 2000 – 6994 to 6175 – down 11.7%.  Including dividends investors are up by an average of 15%! Our grateful thanks to Your Majesty for a superb contribution!

 

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