Company profitability and finance

Quarterly Bulletin 1986 Q2
Published on 01 June 1986

This note discusses the profitability and financing of industrial and commercial companies (ICCs) in 1985.

The main developments were:

  • non North Sea ICCs' profitability increased fat· the fourth successive year, with the pre-tax rate of return rising to 8%, the highest since 1973;
  • non North Sea profits were boosted by falling prices for oil and imported raw materials, but profits in the North Sea sector fell;
  • dividends were up by a quarter and taxes by a sixth;
  • fixed investment increased by 8% in value, and by about 2%-3% in volume terms;
  • ICCs' retained income and financial surplus fell;
  • ICCs raised substantial amounts of external finance both from the equity market and, for the second year running, from banks;
  • the value of takeovers and mergers was £7.1 billion, higher in real terms than in any year since 1972;
  • both capital and income gearing showed modest rises.

PDFCompany profitability and finance

Other Quarterly Bulletin 1986 Q2 articles

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