Lord Stokes counts cost of fuel crisis on profits

By Anthony Rowley

British Leyland's financial results for the first half of the corporation's current financial year will be "seriously affected" by the power crisis, Lord Stokes, chairman of BLMC, said at the annual meeting of shareholders yesterday. The group's £50m rights issue closes for acceptance next week.

"We in company with other motor vehicle manufacturers, have suffered considerable disruption of production by reason of the power dislocation and the shortage of coal." Lord Stokes said.

"This will continue to be felt for a number of weeks to come and we are not yet able to estimate the total effects on our factories and those of our suppliers and other ancillaries."

After the meeting Lord Stokes said he hoped British Leyland would make a profit for the six months period ending on March 31. Last vear the interim profit before tax was £9.5m and this year's figure seems certain to fall short of that. This in turn will almost certainly affect the outcome for the whole of this year and may well halt progress towards restoring the profitability levels BLMC achieved after the merger of British Motor Holdings and Leyland Motors in 1968.

The profit level of around £40m before tax reached in each of the two immediate post merger years fell to less than £4m in 1970, mainly because of industrial disputes, but recovered to £32m last year. Lord Stokes declined to make a forecast for this year, but subject to national conditions and British Leyland's achieving sustained production, it was hoped to maintain last year's 8 per cent (2p a share) total dividend on the capital increased by the recent £50m rights issue. Reassured to some extent by Lord Stokes' comments BLMC shares were marked down slightly, to close l-cp lower at 45p last night. British Leyland had difficulty meeting the high level of United Kingdom demand for cars in January, but everything was being done to get the factories back into production quickly.

"Despite our domestic and national problems I am optimistic for the future", Lord Stokes added.