Composer of `Cats' offers financial catnip to British investors

Andrew Lloyd Webber -- the prolific composer of ``Cats,'' ``Jesus Christ Superstar,'' ``Starlight Express,'' ``Evita,'' and other hit musicals -- is working his theater magic on the City, London's financial district. Mr. Lloyd Webber has offered stock in the Really Useful Group PLC, his copyright and theater company. The initial public offering at 320 pence a share makes the whole business worth more than 35 million ($50 million).

The composer is raising nearly 9 million by selling part of his shareholding, leaving him with a 38 percent stake worth about 13.4 million. Brian Brolly, managing director of the company, will sell an additional 1.2 million shares, reducing his share to 16 percent.

The Really Useful Group (which takes its name from ``The Really Useful Engine that Could'' in the Thomas the Tank Engine stories, a British children's series) develops and exploits Lloyd Webber's musical and dramatic works.

Based on the composer's past musicals, analysts say, this could be a lucrative, if somewhat speculative, investment.

``It's very high profile; everyone whistles `Memory' and knows `Cats,' '' says Max Dolding, an analyst at James Capel & Co. ``The investor is buying a management marketing company in the entertainment business that is exploiting one of the most popular, successful composers in the United Kingdom today.''

The group's income has rocketed since 1983, as productions of ``Cats'' have begun to generate profits. From 475,000 in 1983, pretax profts soared to 2.7 million in the year ending last June.

Last year, 87 percent of the group's net income came from copyrights in ``Cats.'' There are several productions around the world, from Osaka, Japan, to Budapest.

Hamburg and Helsinki will open this year, and there are plans for a traveling version in the United States, where it is already playing on Broadway and in Los Angeles.

Under terms of the deal, the group will use part of the 2 million from the sale to purchase from Lloyd Webber his half interest in London's Palace Theatre which it does not already own. It will also put some of the money toward refurbishing the theater.

The group's existing copyrights are in Lloyd Webber's works, ``Cats,'' ``Starlight Express,'' ``Song and Dance,'' and the ``Phantom of the Opera,'' a new production to be launched later this year.

Although the company has no rights over ``Jesus Christ Superstar,'' ``Evita,'' or other works composed before 1978, Lloyd Webber has assigned the company worldwide copyrights to all works he completes in the next seven years. His earnings as a composer are not part of the group's net income.

Still, given the fickleness of public taste and the possibility that bad reviews could depress performance of the shares, investors do face some risk in buying the company's stock. Nor is there anything to guarantee that the prolific composer will continue to write as in recent years.

``The risks involved are that . . . the successes will continue to roll off his pen,'' says John Spicer, an analyst at Grieveson, Grant & Co.