Burnholme and Forder reconstruction
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NEW CHAIRMAN REVEALS PLANS
by John Darker • Last week the reconstituted board of Burnholme and Forder Ltd were confirmed in office by shareholders at the annual general meeting but it was necessary for a poll of shareholdings to be taken; on a show of hands there appeared to be a small majority against approving the new chairman, Mr T. L. R. Holland.
The agm, and the extraordinary general meeting which followed it, were expected to be lively for earlier this year the Stock Exchange Council and the Takeover Panel became concerned over the plans to reconstruct B and F. The detailed arrangements underlying the takeover of B and F by a new board were outlined in a lengthy circular to B and F shareholders prior to the agm.
Safely installed in the 'chair, Mr Rolland explained the reason for the sale of some of the group's transport companies to Palkit Ltd, a company run by former directors and associates of B and F Ltd.
The new board. said Mr Holland, wanted to set up a group transport organization. Under the previous management there had been no proper co-operation between member companies in the group. Several of the transport companies had run without any interference from head office. The board considered that a greater degree of control and centralization would be necessary if the earnings potential of the company's assets were to be properly realized.
B and F, said Mr Holland, could look forward to the setting up of an integrated group transport system well geared to Britain's entry into the Common Market. It was the board's wish to rebuild the company's road transport fleet and he greatly hoped that the DoE would think again in relation to the carrying capacity of vehicles. It was, he believed, "the height of upside-down mediocrity for the road transport industry to be in the toils of Mr Peter Walker's Ministry, thanks to the pressure of the environment lobby".
The shareholders' circular shows that Frederick Ray Ltd, W. C. Forder Ltd and Crow's Transport Co Ltd Will form the nucleus of the group's transport and warehousing division. There are plans to develop warehoUsing facilities, and any further -warehouse development should include the facilities of a transport depot "which will assist in defraying the heavy costs to the group of service and parking
Some blunt words were used in the circular about the "Crow's" group companies—Crow's Transport Ltd, Crow's Transport (Scotland) Ltd and Alfred W. Ellis (Transport) Ltd. The new B and F board found that after showing aggregate profits (before tax) of ,E55,680 in the year ended August 31 1970, preliminary returns for the six months ended February 28 1971 showed an aggregate net loss in excess of £10,000. "Your board was gravely dissatisfied with the management of these companies, and has taken steps which have resulted in the removal of all the local directors and the appointment of a new managing director from outside the group."
During the 'reorganization of Crow's it was realized that the Little Benton site originally belonging to Alfred W. Ellis (Transport) Ltd was unsuitable as a transport depot and its useful life was limited owing to planning restriction. These premises are to be sold and the proceeds will be used to finance the purchase of a five-acre site at Dunston, well situated between Newcastle and Blaydon, and with substantial storage and parking facilities for
Crow's. The new managing director ' of Crow's, Mr James Kelman, advised the ' board that in his view the condition of the vehicles called for a review of their value. Accordingly, the board decided that an amour of £30,000 should be provided out of reserves as additional depreciation.
A long statement made available at the shareholders' meeting referred to "incorrect and misleading material" published in the Sunday Times (July 11 and 18). The July 11 article was, it was claimed, substantially inaccurate and in the view of the directors "misleading and tendentious by virtue of a number of material omissions". The company had pointed these out to the Sunday Times, expecting that in the July 18 issue a corrective article would appear, but the published piece purported to draw conclusions as to anticipated earnings per share and 'P/E ratios, which were "wholly inaccurate".
To sum up the decisions made last week the board won shareholders' backing for the sale to Palkit Ltd of the following companies:H. Nuttall and Sons Ltd (including its wholly owned subsidiaries Transport and Warehousing (Heywood) Ltd and Canton Transport Ltd); Charles and W. H. Taylor Ltd; William Gaskell and Sons Ltd; Storage and Export Facilities Ltd; Burnholme Transport (Penrith) Ltd; Burnholme Contracts Ltd.
The "Premac" engineering group, of Dunstable, and Keland Ltd, electrical manufacturers, of Blaydon-on-Tyne, are to be purchased.
The company's capital is to be increased to £1.5m by the creation of 7,500,000 shares of 10p each, and additional directors ' are to be appointed, increasing the board strength to nine.