FTSE 100 readies for its fortieth birthday with twenty-six founder members still in the index

Russ Mould

4 October 2023

UK’s premier stock market index celebrates fortieth birthday on 3 January 2024
Benchmark has risen from 1,000 to around 7,660 to provide a capital return of 660%
That is a compound annual return of 5.2% a year
Just fourteen of the 100 founder members are still in the index under the same name
Twelve are still there with a different name and thirteen are there as part of a FTSE 100 firm having been acquired by a current member of the index
Three founder members ultimately went broke

“The FTSE 100 launched on 3 January 1984, to replace the FT-30, and the stock market benchmark’s make up has changed a lot since then. With one more quarterly reshuffle to come before its fortieth birthday, just fourteen founder members are still in the index and still using the very same name, while twelve more are still part of UK plc’s corporate elite, but under a different guise,” says AJ Bell investment director Russ Mould. “The other seventy-four have either fallen down through the ranks into the realms of mid- and small- caps, been acquired, been broken up or (in three instances) gone out of business, as the index has taken on a less domestic and more international flavour.

“Thanks to its ever-changing nature, following the index has helped patient investors protect and augment their wealth. The FTSE 100 has advanced from 1,000 to around 7,600 at the time of writing to provide a 660% capital return, or a compound annual return of 5.2% a year. That beats the 434% total increase, and 3.7% compound annual growth rate (CAGR), in the retail price index (RPI) over the same time frame.

Source: Refinitiv data. *Retail price index rebased to 1000. RPI used as provides longest dataset for UK inflation.

“Critics will argue the FTSE 100 has, however, ossified since the turn of the century. The index peaked at 6,930 on 31 December 1999, just as the technology, media and telecoms bubble began to leak air, and since then it has grubbed out a capital return of just 9.7%. That equates to a turgid compound annual return of 0.4% and comes nowhere close to covering the compound annual rate of inflation of 3.4% (based on the RPI over the past twenty-four years).

“This opens up the FTSE 100 to accusations that it has not done enough to move with the times and become too dependent upon a small number of behemoths that have been in the index for a long time.

“Just a dozen FTSE 100 firms make up half of its current market cap. Eight of them – Shell, Unilever, BP, Rio Tinto, BAT, GSK, RELX and Reckitt Benckiser – were there in 1984, in one way shape or form and two more (HSBC and Diageo) have their origins in founder members of the index, in the shape of Midland Bank (HSBC) and Allied Lyons, Distillers and Grand Metropolitan (Diageo).

“Eight of the forecast twelve biggest contributors to the FTSE 100’s 2023 aggregate-pre-tax profit were also there at the start in 1984 – Shell, BP, Rio Tinto, BAT, Unilever, Barclays, GSK and Lloyds – while NatWest and HSBC can be traced back to two more founder members, National Westminster Bank and Midland Bank.

“And six of the forecast twelve biggest payers of dividends in 2023 also hail from the first crop of FTSE 100 firms. They are Shell, BAT, Rio Tinto, BP, Unilever and GSK, while HSBC and Diageo can trace their origins back to the first crop of constituents.

Twelve biggest contributors to FTSE 100 aggregate totals, 2023
	Market cap		Pre-tax profit		Dividends
AstraZeneca	8.2%	Shell	13.2%	Shell	8.6%
Shell	8.1%	HSBC	10.8%	HSBC	8.3%
HSBC	5.7%	BP	9.1%	BAT	6.9%
Unilever	5.0%	Rio Tinto	4.6%	Glencore	5.8%
BP	4.3%	BAT	4.3%	Rio Tinto	4.9%
Diageo	3.5%	Unilever	3.1%	BP	4.8%
Rio Tinto	3.1%	Glencore	3.1%	Unilever	4.8%
BAT	2.9%	Barclays	3.1%	AstraZeneca	4.7%
GSK	2.8%	GSK	3.0%	GSK	3.0%
Glencore	2.7%	Lloyds	2.9%	National Grid	2.7%
RELX	2.4%	AstraZeneca	2.7%	Vodafone	2.7%
Reckitt Benckiser	2.0%	NatWest Group	2.4%	Diageo	2.3%

Source: Refinitiv data, Marketscreener, consensus analysts’ forecasts

“Yet the FTSE 100 has continued to evolve over time, as can be seen from a simple comparison of the index on 3 January 1984 and 30 September 2023. Further changes are likely, thanks to the final index reshuffle of 2023.

FTSE 100 founders, 3 January 1984	FTSE 100, 30 September 2023
Allied Lyons	3i
Associated British Foods	Admiral Group
Associated Dairies	Airtel Africa
BAT Industries	Anglo American
BICC	Antofagasta
BOC	Ashtead
BPB Industries	Associated British Foods
BTR	AstraZeneca
Barclays	Auto Trader
Barratt Development	Aviva
Bass	B&M European Value Retail
Beecham	BAE Systems
Berisford	Barclays
Blue Circle	Barratt Developments
Boots	Beazley
British Aerospace	Berkeley
British & Commonwealth Shipping	BP
British Electric Traction	British American Tobacco
British Home Stores	BT
British Petroleum	Bunzl
Britoil	Burberry
Bowater	Centrica
Burton	Coca-Cola HBC
Cable & Wireless	Compass
Cadbury Schweppes	ConvaTec
Charterhouse J. Rothschild	Croda
Commercial Union	DCC
Consolidated Gold Fields	Dechra Pharmaceuticals
Courtaulds	Diageo
Dalgety	Diploma
Distillers	Endeavour Mining
Edinburgh Investment Trust	Entain
English China Clays	Experian
Exco International	F & C Investment Trust
Ferranti	Flutter Entertainment
Fisons	Frasers
General Accident	Fresnillo
General Electric	Glencore
Glaxo	GSK
Globe Investment Trust	Haleon
Grand Metropolitan	Halma
Great Universal Stores	Hargreaves Lansdown
Guardian Royal Exchange	Hikma Pharmaceuticals
Guest, Keen & Nettlefolds	Howden Joinery
Hambro Life	HSBC
Hammerson	IMI
Hanson Trust	Imperial Brands
Harrisons & Crosfield	Informa
Hawker Siddeley	InterContinental Hotels
House of Fraser	International Cons. Airlines
ICI	Intertek
Imperial Continental Gas	JD Sports Fashion
Imperial	Kingfisher
Johnson Matthey	Land Securities
Ladbrokes	Legal and General
Land Securities	Lloyds
Legal & General	London Stock Exchange
Lloyds Bank	M & G
MEPC	Marks & Spencer
MFI Furniture	Melrose Industries
Magnet & Southerns	Mondi
Marks & Spencer	National Grid
Midland Bank	NatWest Group
National Westminster Bank	Next
Northern Foods	Ocado
Pearson	Pearson
Peninsular & Oriental Steam	Pershing Square
Pilkington	Phoenix Group
Plessey	Prudential
Prudential Assurance	Reckitt Benckiser
RMC	RELX
Racal	Rentokil Initial
Rank	Rightmove
Reckitt & Colman	Rio Tinto
Redland	Rolls Royce
Reed	RS Group
Rio Tinto-Zinc	Sage
Rowntree Mackintosh	Sainsbury
Royal Bank of Scotland	Schroders
Royal Insurance	Scottish Mortgage Inv. Trust
Sainsbury	SEGRO
Scottish & Newcastle	Severn Trent
Sears	Shell
Sedgwick	Smith & Nephew
Shell Transport & Trading	Smith DS
Smith & Nephew	Smiths Group
Standard Chartered	Smurfit Kappa
Standard Telephone & Cables	Spirax-Sarco Engineering
Sun Alliance & London Insurance	SSE
Sun Life Assurance	St. James's Place
Tarmac	Standard Chartered
Tesco	Taylor Wimpey
Thorn EMI	Tesco
Trafalgar House	Unilever
Trusthouse Forte	Unite
Ultramar	United Utilities
Unilever	Vodafone
United Biscuits	Weir Group
Whitbread	Whitbread
Wimpey (George)	WPP

Source: London Stock Exchange

“The fortunes and fates of the FTSE 100’s founder members can be summarised as follows:

Twenty-six of the FTSE 100’s founder members are still in the index. Fourteen of those even have the same name, although Whitbread, for example, is a different company now from the one it was then. The other twelve have been ever present despite changes in name and sometimes corporate structure, due to mergers and acquisitions or changes in strategy.
Thirteen were acquired and have become part of a current FTSE 100 member.
Two more spawned what are now FTSE 100 firms thanks to spin-outs, demergers and break-ups (Diageo can trace itself back to both Grand Metropolitan and Allied Domecq, while Racal demerged what is now Vodafone).
Forty were acquired by other companies.
Eleven were broken up.
Five are still quoted but are members of a different UK index (Hammerson, Johnson Matthey, Rank, Edinburgh Investment Trust and Elementis, which was known as Harrison & Crossfield at the time).
Three went bankrupt – British and Commonwealth Shipping, Ferranti and MFI Furniture. Acquisitions did for the British and Commonwealth Shipping (1990) and Ferranti (1993), while the latter was also undone by allegations of fraud. The Great Financial Crisis and recession of 2008 proved too much for MFI, although it had long since ceased to be a feature of public markets after a management buy-out in the late 1980s.

Source: Company accounts, Regulatory News Service, London Stock Exchange

“Given the rate of change in technology, consumer tastes and regulation to name but three things that may have posed difficulties for companies over the past forty years, a 3% failure rate does not look too bad. This may help to explain the attraction the FTSE 100 has for many investors, as its member firms’ very scale means they tend to be very dependable and can be excellent sources of cashflow and thus dividends given their maturity. FTSE 100 firms are also subject to the very highest levels of scrutiny, and corporate governance has to be top notch to withstand the market’s examinations.

“Nevertheless, high-profile accidents such as Ferranti, let alone Maxwell Communications, Coloroll, Polly Peck and more recently NMC Health, show investors cannot be complacent and must always do their research. Careful analysis of competitive position, management, strategy and financials is as important as ever, and will become all the more so if the London Stock Exchange eases its listing rules in its quest to facilitate more new listings and market entrants.”

	In FTSE 100, same name		Comment
1	Associated British Foods
2	Barclays
3	Barratt Development
4	Land Securities
5	Legal & General
6	Lloyds Bank
7	Marks & Spencer
8	Pearson
9	Sainsbury
10	Smith & Nephew
11	Standard Chartered
12	Tesco
13	Unilever
14	Whitbread

In FTSE 100, different name		New name
1	BAT Industries	British American Tobacco	Financial services business sold, and BAT spun out (1998)
2	British Aerospace	BAE Systems	Created by merger with defence arm of GEC, which then became Marconi (1999)
3	British Petroleum	BP
4	Commercial Union	Aviva	Merged with General Accident (1988); Merged with Norwich Union to create CGU (2000); renamed 2009
5	Glaxo	GSK	Result of Glaxo's merger with Wellcome (1995) and also SmithKlineBeecham (2000)
6	Imperial	Imperial Brands	Acquired by Hanson (1985), Imperial Tobacco spun out (1996). Renamed Imperial Brands (2016).
7	Prudential Assurance	Prudential / M&G	Spun off M&G (2019) and Jackson Financial (2021)
8	Reckitt & Colman	Reckitt Benckiser	Created by merger with Benckiser (1999)
9	Reed International	RELX	Merged with Elsevier (1992) to create Reed Elsevier. Renamed RELX in 2015.
10	Rio Tinto-Zinc	Rio Tinto
11	Royal Bank of Scotland	NatWest	Renamed NatWest Group (2020)
12	Shell Transport & Trading	Shell	Merger between legally separate Shell and Royal Dutch entities (2005). Name changed to Shell and dual structure scrapped in 2021.

Acquired, part of FTSE 100 firm		New owner
1	Allied Lyons	Diageo	Merged with Pedro Domecq (1994). Acquired and broken up by Pernod Ricard, Fortune and Diageo
2	Beecham	GSK	Now part of GSK
3	British Electric Traction	Rentokil Initial	Acquired by Rentokil (1996) and now part of Rentokil Initial (RTO)
4	Britoil	BP	Acquired by BP (1988)
5	Distillers	Diageo	Now part of Diageo
6	General Accident	Aviva	Part of Aviva
7	Great Universal Stores	Experian, Sainsbury	GUS broke itself up by demerging Experian and Home Retail in 2006. Home Retail (Argos, Homebase) was acquired by Sainsbury in 2016 for £1.4 billion. Sainsbury sold Homebase to Wesfarmers for £340 million and kept Argos.
8	Guest, Keen & Nettlefolds	Melrose Industries, Dowlais	Acquired by Melrose Industries (2018), which then spun off parts of the GKN business as Dowlais in 2023
9	Ladbrokes	Entain	Merged with Coral (2016). Acquired by GVC (2018), now known as Entain and a FTSE 100 firm.
10	Midland Bank	HSBC	Now part of HSBC
11	National Westminster Bank	NatWest Group	Now part of NatWest, having been acquired by Royal Bank of Scotland, which became RBS and was then renamed (2020)
12	Plessey	BAE Systems	Acquired by GEC and Siemens (1989) and then merged to form BAE Systems (1999)
14	Wimpey (George)	Taylor Wimpey	Now part of Taylor Wimpey

Spin-outs or mergers to create new FTSE 100 firm		New name
1	Grand Metropolitan	Diageo	Merged with Guinness to form Diageo (1997).
2	Racal	Vodafone	Spun out what became Vodafone. Acquired by Thales (2000)

	Still quoted, another index	New name
1	Edinburgh Investment Trust
2	Hammerson
3	Harrisons & Crosfield	Elementis
4	Johnson Matthey
5	Rank

	Acquired by another firm	New owner
1	Associated Dairies		Now known as Asda and part of Wal-Mart. Announced plans to merge with Sainsbury in 2018, which failed.
2	BICC	Balfour Beatty	Part of Balfour Beatty (FTSE 250)
3	BOC		Acquired by Linde (2005)
4	BPB Industries		Acquired by Saint Gobain (2005)
5	BTR		Part of Invensys (BTR-Siebe merger), itself acquired by Siemens (2013)
6	Berisford		Renamed Enodis and acquired by Manitowoc (2008)
7	Blue Circle		Acquired by Lafarge (2001)
8	Boots		Alliance Boots was an LBO by KKR (2007). Merged with Walgreens in 2014 to form Walgreens Boots Alliance.
9	Bowater		Name changed in 1995 as business focus shifts from paper to consumer packaging. Acquired by Ball for £4.5 billion (2016)
10	British Home Stores		BHS became part of Philip Green's Arcadia Group. It was sold for £1 in 2015. UK arm went bust in 2016 and overseas arm sold to Qatari retail group
11	Burton		Burton became part of Philip Green's Arcadia Group, which collapsed in 2020 and was broken up.
12	Cable & Wireless		Split into two companies (2010). Cable & Wireless Worldwide (CWW) bought by Vodafone (2012), Cable & Wireless Communications (CWC) by Liberty Global (2016).
13	Consolidated Gold Fields		Acquired by Hanson (1988)
14	English China Clays		Acquired by Imerys (1999)
15	Exco International	TP-ICAP	Acquired by British & Commonwealth, Intercapital and now part of TP-ICAP
16	Fisons		Acquired by Rhone Poulenc (1995). Rhone Poulenc then merged with Hoechst to form Aventis (1999) which was then broken up, to leave the Rhone Poulenc business split across Solvay, Bayer and Sanofi
17	Globe Investment Trust		Acquired by British Coal Pension Fund (1990)
18	Guardian Royal Exchange		Acquired by AXA (1999)
19	Hambro Life		Became Allied Dunbar, acquired by BAT, merged with Eagle Star and sold to Zurich (1998)
20	Hawker Siddeley		Acquired by BTR (1992) and thus now part of Invensys, bought by Siemens (2013)
21	House of Fraser	Frasers	Acquired by Al-Fayed family (1985). Re-listed 1994. Acquired by Baugur (2006). Acquired by Sanpower (2016). Adminstration 2018, acquired by Sports Direct, which was renamed Frasers in 2019
22	MEPC		Acquired in 2000 by GE Capital and Hermes joint venture. Hermes, now BT pension fund, bought out GE in 2003.
23	Northern Foods		Acquired by Boparan (2011)
24	Pilkington		Acquired by NSG (2006)
25	Magnet & Southerns		Went under in 1989, broken up in 1990 and now part of Nobia
26	RMC		Acquired by Cemex (2005)
27	Redland		Acquired by Lafarge (1997)
28	Rowntree Mackintosh		Bought by Nestle (1988)
29	Royal Insurance		Created by merger between Sun Life and Royal Insurance (1996). Acquired by Tryg and Intact Financial (2021)
30	Scottish & Newcastle		Acquired by Heineken and Carlsberg (2008)
31	Sears		Sears was part of Philip Green's Arcadia Group, which collapsed and was broken up (2020).
32	Sedgwick		Acquired by Marsh & McLennan (1998)
33	Standard Telephone & Cables		Acquired as STC by Nortel (1991)
34	Sun Alliance & London Insurance		Part of RSA, which was acquired by an Intact-Tryg consortium in 2020
35	Sun Life Assurance		Acquired by AXA (1997)
36	Tarmac	CRH	Acquired by Anglo American (1999), part-merged with and part-sold to Lafarge (2013) to create Lafarge Tarmac. Anglo American sold its remaining stake in 2014 and Lafarge then sold the business to CRH (2015) to allay competition regulators after the French firm's merger with Holcim (2014).
37	Trafalgar House		Acquired by Kvaerner (1996)
38	Trusthouse Forte	ITV	Acquired by Granada (1996) (now part of ITV), merged with Compass and Forte then demerged
39	Ultramar		Acquired by Lasmo (1991), which was in turn acquired by ENI (2001)
40	United Biscuits		Acquired by private equity consortium (1996)

	Broken up
1	Bass		Sold brewing arm to Interbrew in 2000. Became Six Continents and then split: Mitchells & Butler and InterContinental Hotels (which in turn sold off Britvic in 2005)
2	Cadbury Schweppes		Drinks unit demerged (2008) and then merged to form Dr Pepper Snapple. Cadbury bought by Kraft (2010), itself since broken into two
3	Charterhouse J. Rothschild	St James's Place	Now part of St. James's Place, among others
4	Courtaulds		Split into two (1990). Textiles is part of Sara Lee. Chemicals is part of Akzo Nobel and PPG Industries
5	Dalgety		Now part of Kerry Group, Nestle and Wesfarmers
6	General Electric Company		Broken up, renamed Marconi, the rump of which was sold to Sweden's Ericsson following bankruptcy. The remainder, Telent, is now private.
7	Hanson Trust		Final unit bought by HeidelbergCement (2007)
8	ICI		Broken up with final rump sold to Akzo Nobel (2007)
9	Imperial Continental Gas		Broken up 1987. Calor now owned by SHV, Contibel by Tractebel (which was in turn acquired by Suez in 1999 and is now part of Engie).
10	Peninsular & Oriental Steam	Carnival	Acquired by Dubai Ports (2006). P&O Princess Cruises spun off 2000. Merged with Carnival in 2002. Logistics and ferries acquired by DP World (2006). Shipping operations spun off into P&O Nedlloyd (1997). Nedlloyd bought in the whole business in 2004 and Royal P&O Nedlloyd was acquired by Maersk in 2005.
11	Thorn EMI		Thorn and EMI demerged 1996. Thorn now owned by private equity, EMI by Universal and a consortium

	Bankrupt
1	British & Commonwealth Shipping		Went under (1990) after diversification spree, including Atlantic Computers
2	Ferranti		Went bust in 1993 following disastrous International Signal & Controls acquisition
3	MFI Furniture		Failed in 2008 (had been subject to a management buy-out in 1987)

Source: Company accounts, Regulatory News Service, London Stock Exchange

Russ Mould

Investment Director

Russ Mould’s long experience of the capital markets began in 1991 when he became a Fund Manager at a leading provider of life insurance, pensions and asset management services. In 1993, he joined a prestigious investment bank, working as an Equity Analyst covering the technology sector for 12 years. Russ eventually joined Shares magazine in November 2005 as Technology Correspondent and became Editor of the magazine in July 2008. Following the acquisition of Shares' parent company, MSM Media, by AJ Bell Group, he was appointed as AJ Bell’s Investment Director in summer 2013.

Contact details

Mobile: 07710 356 331
Email: russ.mould@ajbell.co.uk