It is hard to imagine that since I had begun my career as an equity analyst in 1984 and specialised in engineering and capital goods that included aerospace, defence and automotive sectors, well of 80% of the company names that I knew back then or was responsible for ‘following’ have all but disappeared from list of quoted company lists.
Bad enough that large companies like Joseph Lucas, an FTSE100 index stock along with other once large manufacturing groups such a Tube Investments (TI as it was later known) and GEC that were all similarly quoted in the top one-hundred list of UK stocks share one thing in common – they are names of companies that no longer exist today in their original form albeit that some of the more specialist subsidiaries they had can now be found within other companies.
Thankfully, not all the listed engineering companies that I had responsibility to follow as a specialist engineering analyst back in the eighties and nineties have bitten the dust. Quite the opposite as some have actually gone from strength to strength. For instance, similarly quoted FTSE100 quoted stocks such as GKN along with BAE Systems, Rolls-Royce, Babcock International and Smiths Group (formally Smiths Industries) are all thriving today reasoned in my view by each having had very good management, sound strategy and because each has embraced globalisation by transforming themselves internationally both in terms of markets and manufacturing.
While each of the above company still has an important UK footprint and each continues to play a significant role in the UK economy through exporting, paying taxes here, maintaining the skills that we need and investing in the their own future here, much of the growth they have enjoyed has come through international investment.
Other smaller but no less significant in terms of maintaining the important skills that the UK needs and in playing a role in exports that are still thriving include Bath based valve actuator company, Rotork along with Cheltenham Spa based steam trap manufacturer, Spirax-Sarco. The same is true of companies such as IMI, BBA, Weir Group, Senior Engineering and albeit no longer an engineering company after it sold Metro Cammell Weymann, Laird Group as well. Meggitt is another very interesting company that is back on the move up these days and while Cobham may have had its fair share of problems of late, it remains a very sizable and still profitable company that is at last into a recovery process.
True, many of those listed above are very different today than they had been when they were on my original list of companies to follow. For instance, South African interests apart, there is no other single subsidiary company within the Babcock International today that was owned by the company say back in 1985. As mentioned, many former engineering companies such as Laird Group have completely changed their spots and turned themselves into technology or service based businesses. Adapt and change has been the motto for most of them. Indeed, if one was to travel back further and look at companies whose history exceeds well over one hundred years such as GKN, you would be hard pressed to find similarities in what they do today compared to what they did back then.
Others large formally quoted companies at the time that I came onto the scene as an equity analysts such as Dunlop, one that I consider to have been a badly run entity during the Geddes years, found themselves being easily swallowed up by the new breed conglomerates such as BTR and Siebe who were considered by some as merely being asset strippers in disguise.
Talking of companies that changed their spots, I don’t suppose that there are that many of you reading this who remember a company called Amalgamated Anthracite Holdings, a mining company that was much better known under its acronym, as AAH. Formed in South Wales in 1892, rather amazingly AAH still survives today as a distributor of pharmaceutical products and one sees its red vans outside private pharmacies all over the country. From a coal to pharmaceutical products – an amazing story.
Others have not been so fortunate and as I look back though my piles of private papers and analysts reports I remember with pleasure wonderful names such AE Group, AEI, Alfred Herbert, BICC, BSA, John Brown, McKecknie Brothers, Glynwed, Delta Metals, APV, Baker Perkins, Pegler-Hattersley, Simon Engineering, Northern Engineering Industries, FH Tomkins, Benjamin Priest, Newman Tonks, Duport, John Folkes Hefo, Ransom Hoffman Pollard, Triplex Foundries, Armstrong Equipment, Birmid Qualcast, FH Lloyd, Ransomes Sims & Jefferies, Deritend Stamping, Brickhouse Dudley, Renold Chain plus a host of others that have either disappeared into that big black engineering company hole or have been perhaps taken over or maybe, as in the case of Glynwed having sold off its main copper based interests, morphed into one of its own former subsidiaries – in this case Aga Cookers.
Some of the companies I remember well met a pretty awful end at the hands of the receiver. These included Acrow, a manufacturer of cranes and builders plant that was placed into administration in 1985. Acrow was to be the first of many that went down that particular road.
Others such as Wolseley Hughes, what is Wolseley plc today but that old hands will remember once traded under the name the Wolseley Sheep Shearing Company in the nineteenth century, would later manufacture bicycles and cars – yes, it is this company that started building Wolseley Cars in Birmingham in the late 1890’s, are still with us – in this case as one if not the largest builders/plumbers merchants groups in the UK.
In order not to depress myself too much I have deliberately avoided up to now mentioning British Leyland and Rover Cars but I can at least take comfort that some parts of the UK operation survived and went on under different ownership to greater things – thank you BMW Mini, a subsidiary of the Munich based BMW Group and to the Jaguar Land Rover owner Tata Group for the trust, investment and success that you have achieved. I may hope also that, as mentioned a couple of days ago, the former Manganese Bronze company which in its time owned Birmingham Small Arms Ltd (better known as BSA) which itself owned Daimler Cars before this entity was sold to Jaguar Cars fifty years ago, and that is best known for producing London taxi cabs, will thrive under its Chinese owner Geely.
Some of the companies had absolutely brilliant names too – a weekend test for you – I wonder who amongst my large readership remembers Dudley based Accles & Pollock, a company that for a time was owned by Tube Investments and that amazingly had also pioneered steel golf club shafts in its time apart from manufacturing tubular box spanners, tubular furniture – the latter including bus seats?
Forgive me – but it is after all Friday today – but the ‘name’ of Accles and Pollock turned out to be rather unfortunate for other reasons – unless of course you happened to be in the game of marketing! Quite Often – regularly in fact – the name of Accles & Pollock found itself being inadvertently (or otherwise) revised into Tickles& Wallop, Ankles & Fetlock, Apples & Scollops, Speckles and Dollops and one that was a particular favourite of mine, Accles and Pillock. Even so and unabashed, such was the skill of management in respect of marketing that for a big advertising campaign during the mid-fifties and that included Punch Magazine plus others including Picture Post, Illustrated and Everybody’s, it collected up all the various names it had been called and displayed them on a full page advertisement!
I am not absolutely sure but I believe that under different ownership (it had been part of Tube Investments for many years) today Accles & Pollock survives to this day in manipulation of tubing for the aerospace and nuclear industry.
Talking of names, does anyone remember King Fifth Wheel? In May 1981, TI had bought the American firm King Fifth Wheel (manufacturers of components for the American aircraft industry, supplying flash welded rings to the major US plane makers) in order to complement its Reynolds Tube European business activities. Indeed, in the UK KFW combined with TI Reynolds Ring Division, had become the largest world supplier of engine rings. The King Fifth Wheel acquisition also brought Abar Corporation, a specialist in high vacuum furnaces and heat treatment technology, into the TI Group. To expand the business into Europe
The demise of TI Group (the bulk of what remained including John Crane Group, Bundy Small Diameter Tube and the remaining automotive interests, was acquired by Smiths Industries in 2000 – a deal that short term ‘city’ investors had wanted to see but that was seriously questioned in terms of good strategy by others. In order to reduce the potential of risk Smiths’ management segregated itself from TI Automotive including Bundy concentrating on the best parts acquired including Dowty Aerospace and John Crane. TI Group was an example of a once great company placed in the wrong hands and exposed to financial engineering. Smiths would later sell its aerospace interests to the US General Electric engineering and financial conglomerate although it continues to own John Crane.
I hope that some of you – particularly of my age – have found the above interesting and enjoyable. For the younger members of my list, all that I can say is that the above long list of failed companies was caused primarily by many being mature and failing to invest in their own future. Others failed because of very poor management or greed.
Have a nice weekend – CHW (London 24th March 2017)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785