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Van Elle board urges shareholders to reject coup bid

22 Nov 17 The directors of foundations specialist Van Elle say that an attempt by founder Michael Ellis to wrest back control is “driven more by his personal agenda than the interests of the shareholders as a whole”.

Michael Ellis wants control back
Michael Ellis wants control back

An attempt by Mr Ellis to get himself and his son-in-law Thomas Lindup back onto the board at the expense of chief executive Jon Fenton and director Robin Williams will be voted on by Van Elle shareholders at a general meeting in London on 15th December 2017.

Michael Ellis has already inadvertently got one of his wishes: Jon Fenton’s resignation was announced today, although it is emphasised that this is due to a family crisis and not business issues. A serious medical matter within his close family has become acute in recent weeks and requires his full attention.

Van Elle floated on the stock market last year. Michael Ellis, aged 73, retired as chairman in January 2017. He and his family still own 20% of the business.

Earlier this month Mr Ellis requisitioned a shareholder meeting to vote on boards changes. At the request of Mr Ellis, there are five resolutions to be voted on:

  1. the appointment to the board of Michael Ellis as a director;
  2. the appointment to the board of Thomas Lindup as a director;
  3. the removal from the board of Jon Fenton as a director;
  4. the removal from the board of Robin Williams as a director; and
  5. the removal of any person appointed as a director of the company since the requisition date and who is not one of the persons referred to above.

Thomas Lindup was previously managing director of Van Elle but left a few weeks after his father-in-law. The board saw no need to replace him, since it already had Mr Fenton (an Ellis appointment in the first place) as chief executive.

The board is recommending that shareholders vote against all of the Ellis resolutions, saying that the company delivered profit growth in fiscal 2017, nothing has changed and the Ellis resolutions would significantly weaken corporate governance and the independence of the board.

Shareholders are told firmly: “The board believes the Ellis resolutions reflect the failure by Mr Ellis to accept that Van Elle is no longer his private family business and that the Ellis Resolutions serve to promote the interests of Mr Ellis and his family, not necessarily to the benefit of the company and its other shareholders.

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Chairman Adrian Barden said: "The requisition by Michael Ellis is simply an attempt by him to gain greater control over the business at the expense of other shareholders.  He seems reluctant to accept that Van Elle is no longer his private family business and that it is now subject to full and proper corporate governance.

"Van Elle is a business in good health, has a strong management team and has an exciting strategy to grow the business over the medium-term.

"The board unanimously and strongly recommends that shareholders vote against all the resolutions."

At the same time, Van Elle issued a regular trading update today ahead of announcing its interim results for the six months to 31st October 2017, which come out in January.

Half-year turnover of is expected to be around £53m (H1 2016: £43.1m) with underlying profit before tax up 15% from last year’s £4.7m.

The general piling, ground engineering products and ground engineering services divisions have been performing broadly to plan. Only the specialist piling division has been ‘more mixed’ with difficulties on a couple of rail electrification contracts impacting on divisional profits.

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