At the Going Down of the Sun: Tate & Lyle and the FT30

In an obscure corner of the UK market, there remains a puzzling survivor: the FT30 Index. This is the oldest continuous equity Index in the UK, having been founded in July 1935 as the Financial News 30 Share Index (also known as the FT30 Ordinary Share Index). Superseded in age only by the Dow Jones Industrial Average (1896) and the Dow Jones Transportation Average (1884), the venerable and enduring nature of the FT30 is such that it wasn’t until the 1980s that European stock exchanges began catching up with the launch of the CAC in 1987 and the DAX in 1988, to name but two.

The index was created in 1935, when Stanley Baldwin was Prime Minister, to monitor share price movements in 30 British companies that at the time were deemed to mirror the British economy. The FT30 remained the main London Index until it was superseded by the FTSE100 in 1984. Interestingly, the FT30 was never abandoned by the LSE and continues to exist, albeit as something of a bygone curiosity. Perhaps it owes its survival to the unusual nature of its makeup, which continues to tell us something about the state of British industry and the changing nature of the UK economy.  

The FTSE100 is now the leading (if far from being the most influential) LSE Index and was created as a constituency of the 100 leading companies by capital value at a specific point in time. Companies, as with the football league, are promoted and relegated as their fortunes gain and wane and is therefore purely mathematical in its makeup. However, the FT30 was created to do something entirely different; to reflect the nature of British industry, and in 1935 that meant manufacturing. The constituents were chosen by the editor of the Financial Times and senior colleagues, with companies only exiting the Index if they collapsed or were taken over; any new entrants had to be complementary replacements It was therefore a largely static Index that represented what today we would call UK Plc. The reason why this is significant is that of the original 30 constituents, only Tate & Lyle, chosen to represent food manufacturers, remains. In this long-forgotten corner, Tate & Lyle continues as a major industrial constituent, despite being relegated to the FTSE250 in its more modern form. Should the expected £2.7bn takeover of Tate & Lyle by Ingredion proceed, it will mean the last original member of the FT30 exiting, completing a profound re-imagining of what constitutes British industry after 91 years.

The FT30 in its heyday was a veritable rollcall of the titans of British industry¹. There were, for instance, no financials or service companies such as banks and insurers. The premier league of companies went to chemicals, engineering, steel, coal and cotton. The index reflects the ebb and flow of political conviction – private steel and coal companies dropping out in the late 1940s as they were nationalised, and previously public companies entering during the heyday of Thatcherite privatisation. Once proud names such as Coats, Courtaulds, Bass, Watney, Distillers, Woolworth, Harrods, and the long forgotten International Tea Company and Dorman Long², were all once represented. Bolsover Colliery and United Steel disappeared as they were melded into public institutions – the National Coal Board and British Steel respectively. United Steel was restored to the Index in 1960, only to leave again after re-nationalisation by Harold Wilson’s Labour government in 1966. Through the lens of the FT30 we see more clearly than in any other way the roller-coaster of political ideology around ownership over the past century as companies wrestled with ever-changing political headwinds. Tate & Lyle, the result of a merger between Henry Tate & Son, sugar refiners, and Abram Lyle & Sons, syrups and molasses, in 1921, became the sole food manufacturing constituent in 1935³, but was earmarked by Clement Attlee for nationalisation in 1945, only to be fiercely and successfully resisted. Tate & Lyle is now one of six FT30 companies that are not in the FTSE100⁴.

In more recent times, the Index witnessed a flurry of new entrants following privatisation: British Gas, Scottish Power, British Airways, British Aerospace, and British Telecommunications to name just five, with even some of these now disappearing into new businesses, or having exited due to takeover. 

The Index today, although still just 30 companies, reflects a more modern UK Plc; banks were allowed into the Index in the 1990s, with NatWest and Lloyds (but not the international majors HSBC and Barclays) in the Index. Insurance has a sole constituent, Legal & General, but wider financial services has seen Wise, Man Group and Aberdeen included. Retailers are now represented by Tesco, Next and Burberry, replacing the likes of Woolworth. The multiple brewers and distillers are now represented by just one beverages conglomerate: Diageo, which swallowed up two previous members – Watney and Distillers. Melrose, on the face of it an unlikely member of the FT30 Index is a direct swap for GKN (called Guest, Keen & Nettlefolds in 1935), which it took over in 2018. Strangely, Imperial Tobacco, a member of the Index in 1935, has been swapped for its peer, BAT, which now represents tobacco.

The possible exit of Tate & Lyle will bring a colourful and rich history to an end; not just in another well known British industrial titan leaving the London Stock Exchange after nearly a century⁵, but more quaintly, the last surviving and continuous vestige of a once proudly distinctive and very British Index.

Notes

¹ The original FT30 constituents in July 1935 were Associated Portland Cement; Austin Motor, Bass, Bolsover Colliery, Callenders Cables & Construction; Coats; Coutaulds; Distillers; Dorman Long; Dunlop Rubber; Electrical & Musical Industries (EMI); Fine Spinners & Doublers; GEC; GKN; Harrods; Hawker Siddeley; ICI; Imperial Tobacco; International Tea Co.; Patons & Baldwins; Rolls Royce; Tate & Lyle; Turner & Newall; United Steel; Vickers-Armstrong; Watney Combe & Reid and FW Woolworth & Co.

² Dorman Long & Co was a steel producer and mining company founded in 1875 and was listed on the LSE in 1893. Nationalised in 1951, it returned to the LSE in 1954 before final delisting and re-nationalisation in 1968, after which the consolidated British Steel Corporation eventually became Corus listed in Amsterdam; Corus was acquired by Tata Steel in 2007.

³ There are now two: Associated British Foods (ABF) is in the Index; Compass Group is also in the Index following Granada’s breakup into what became ITV and Compass Group

⁴ At time of writing Aberdeen, ITV, Man Group, Melrose Industries and WPP are FTSE250 constituents

⁵ Tate & Lyle was listed on the LSE in 1938; owing to a quirk of the Index compilers, Tate & Lyle was admitted to the FT30 in 1935 despite being a private company on the basis of its longevity and central importance to British industry.