Crystal Amber Fund Limited Fund requisitions General Meeting of Northgate plc

 
TIDMCRS TIDMNTG 
 
11 March 2019 
 
                          CRYSTAL AMBER FUND LIMITED 
 
                     ("Crystal Amber Fund" or the "Fund") 
 
       Crystal Amber Fund requisitions General Meeting of Northgate plc: 
 
      Proposes to remove chairman and appoint a new independent director 
 
Crystal Amber Fund, the activist investment fund, announces that it has today 
delivered to the board of Northgate plc ("Northgate") a requisition notice 
requiring the company to convene a General Meeting at which resolutions will be 
proposed to remove Northgate's chairman, Andrew Page, and appoint Steve Smith 
to the board as a non-executive director. 
 
The Fund believes that Mr Page has been the principal driver of Northgate 
Group's lacklustre performance, both operationally and in generating value for 
shareholders, since he became chairman in September 2015. 
 
During Page's tenure as chairman, between the first half of FY16 and the first 
half of FY19, Northgate's operating profit fell by 29% and its return on 
capital employed dropped from 12.0% to 6.7%.  Despite enjoying the tailwind of 
a growth market, Northgate's number of vehicles on hire in the UK and Ireland 
is lower in organic terms than in October 2015.  Since Page's appointment as 
Chairman, Northgate has achieved a total shareholder return of -16%, during a 
period when the Numis UK Mid Cap Index (excluding Investment Companies) has 
delivered +24%. 
 
Richard Bernstein, investment adviser to Crystal Amber Fund, said: "In the 11 
years since the Fund was established, this is only the second time that we have 
felt compelled to requisition a General Meeting of an investee company to 
change its board.  We have attempted to engage repeatedly and constructively 
with the Northgate board as a major shareholder since 2016.  We have finally 
lost patience with Mr Page's refusal to listen to positive proposals to enhance 
shareholder value. 
 
"He has presided over multiple profit warnings, a culture of inept 
communications with the market and, in our view, has failed to ensure there is 
the right mix of skills and experience on the board.  As chairman, he inherited 
a business with a strong market share in a healthily-growing sector, yet his 
tenure has left the company totally lacking in strategic direction and 
languishing in the doldrums.  We believe that Northgate is a fundamentally good 
business with enviable positions in each of its markets, but it suffers from 
the inadequate stewardship provided by the board led by Mr Page, which is 
preventing it from achieving its true potential." 
 
Crystal Amber's second resolution at the General Meeting - which Northgate is 
obliged to hold during April, under the provisions of the Companies Act - seeks 
to appoint Steve Smith to the Northgate board. 
 
Mr Smith is a former Chief Executive Officer of Northgate.  He worked for the 
group for two decades and during his time as Managing Director of vehicle 
operations and subsequently Group CEO, Northgate expanded from a base of 2,500 
vehicles, located mostly in the north east of England, to a fleet of 109,000 
vehicles across the UK, Ireland and Spain.  He was due to retire as CEO in 2009 
but stayed a further year at the request of the Board to help the group 
navigate the downturn caused by the financial crisis.  Mr Smith has maintained 
a private shareholding in Northgate. 
 
He is currently a non-executive director of Ramsdens Holdings plc and three 
private companies. 
 
Richard Bernstein commented: "Steve Smith led the team that grew Northgate 
successfully to the scale and market power it has today, a legacy that is being 
squandered by the current board led by Andrew Page.  We believe that his track 
record as a very successful former CEO of the group and his unrivalled 
understanding of the commercial vehicle hire sector mean that his election to 
the board would be a huge boon for all shareholders.  We could all have more 
confidence that Northgate would properly exploit its strong base and return 
more value to shareholders with his wisdom and experience in the boardroom." 
 
Additional information regarding Crystal Amber's reasons for requisitioning the 
General Meeting is available via the Fund's website here: https:// 
crystalamber.com/ 
 
For further enquiries please contact: 
 
Crystal Amber Fund Limited 
 
Christopher Waldron (Chairman)                                 Tel: 01481 742 742 
 
Allenby Capital Limited - Nominated Adviser 
 
David Worlidge/Liz Kirchner                                    Tel: 020 3328 5656 
 
Winterflood Investment Trusts - Broker 
 
Joe Winkley/Neil Langford                                      Tel: 020 3100 0160 
 
Crystal Amber Advisers (UK) LLP - Investment Adviser 
 
Richard Bernstein                                              Tel: 020 7478 9080 
 
 
 
END
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