Britain: Comeback at Courtaulds

In the roughest takeover battle in British history, the ancient and slightly moribund textile-making firm of Courtaulds, Ltd. barely held off giant Imperial Chemical Industries Ltd. last year by promising to mend its ways. The world’s second biggest synthetic fiber manufacturer (after Du Pont), Courtaulds pledged an end to the secretive, damn-the-investor attitude prevailing since the firm was founded 147 years ago by Huguenot refugees named Courtauld. It also predicted that fiscal 1963 would bring a 30% rise in pre-tax earnings to $65 million.

Last week, to the dismay of those skeptical stockholders who had switched shares and given I.C.I, a 38.5% interest in the company, Courtaulds reported that earnings for the year ending last March jumped to a surprising $74 million on sales of $519 million. The chal lenge of takeover has given the old company such a new openness that Managing Director Frank Kearton, 51, says, “We are coming to be like those film starlets who don’t care what’s written about them as long as they get their names in print.”

More Markets, Less Sentiment. More than attitudes have changed. Courtaulds has increased by 29% its exports of important fibers from Britain, and is now producing at capacity in most of the 20 countries where it manufactures. The company’s viscose division, which controls 10% of the world production of that staple of rayon making, increased earnings 60%, winning out over competing nylon makers in securing three-quarters of the British market for rayon tire cords. Courtaulds has expanded its acetate sales for cigarette filters, increased its output of paints, packaging films and aerosol cans.

Money-losing items have been cut without sentiment. At Samuel Courtauld & Co., a division dating back to the days when Courtaulds was mostly famous for silk mourning crepe, uneconomical lines of fabrics for clothing and industry were eliminated. Explains Kearton: “The important thing is to stop promptly when you see you are on the wrong track.”

Patching the Wounds. I.C.I., though rejected by the majority of Courtaulds stockholders, nonetheless gets a consolation prize, collecting $8.1 million in dividends from Courtaulds’ earnings for fiscal 1963. The value of Courtaulds stock that it bought in the heat of the takeover battle has increased by $110 million. “In fact,” muses Kearton, “the only losers are those shareholders who moved over during the fight.”

Last May, Courtaulds and I.C.I., which commonly own British Nylon Spinners Ltd., formally healed their split by bidding jointly for an interest in a Lancashire textile mill, Tootal Ltd. Fast-expanding Courtaulds has already bought another Lancashire mill, is negotiating for two more.