TIDMVANL
RNS Number : 1670X
Van Elle Holdings PLC
22 November 2017
22 November 2017
Van Elle Holdings plc
("Van Elle")
Notice of General Meeting and Posting of Circular to
Shareholders
The Board's unanimous recommendation is to VOTE AGAINST all of
the Ellis Resolutions
Further to the announcement dated 13 November 2017 in connection
with the requisition of a general meeting of the Company by Michael
Ellis (the "General Meeting"), Van Elle announces that the circular
containing the notice of general meeting (the "Circular") is being
posted today to Van Elle shareholders ("Shareholders"). The
Circular will shortly be available on the Company's website at:
www.van-elle.co.uk.
The letter from the Chairman contained within the Circular is
set out in the appendix to this announcement.
The Board unanimously recommends that Shareholders VOTE AGAINST
all of the Ellis Resolutions to be proposed at the General Meeting
for the following reasons:
-- the Company's strategy remains unchanged with the Board working to deliver this strategy;
-- the Company delivered profit growth in FY2017 and the Board's expectations for FY2018 are
unchanged;
-- the Board is engaged in an independent process to identify a
new Chief Executive Officer; and
-- the Ellis Resolutions would significantly weaken the
independence of the Board and the overall level of corporate
governance within the Company.
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.
Details of the General Meeting
The General Meeting will be held at the offices of Eversheds
Sutherland (International) LLP, One Wood Street, London EC2V 7WS at
noon on 15 December 2017.
Expected Timetable of Principal Events:
Latest time and date for Noon on Wednesday
receipt of Forms of Proxy 13 December 2017
--------------------------- ---------------------
Voting record time Close of business
on 13 December 2017
--------------------------- ---------------------
General Meeting Noon on Friday 15
December 2017
--------------------------- ---------------------
Adrian Barden, Chairman of Van Elle, commented:
"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."
Enquiries:
Instinctif Partners (Financial
Public Relations) 020 7457 2020
Mark Garraway
James Gray
Rosie Driscoll
Peel Hunt LLP (Nominated Adviser
and corporate broker) 020 7418 8900
Charles Batten
Mike Bell
Justin Jones
Market Abuse Regulation
The information contained within this announcement is deemed by
Van Elle to constitute inside information as stipulated under the
Market Abuse Regulation. Upon the publication of this announcement
via a regulatory information service, this inside information is
now considered to be in the public domain.
APPIX
CHAIRMAN'S LETTER
(EXTRACTED FROM PAGES 5 TO 9 OF THE CIRCULAR)
"Dear Shareholder
1. INTRODUCTION
I am writing to you because we have to convene a general
meeting. Before I deal with that, I thought it would be helpful to
bring you up-to-date with developments at your Company. We have
issued two announcements today: a trading update and news on the
management team.
I am pleased to tell you that trading overall has been good in
the first half of the current year and your Board has confirmed
that its expectations for the full year remain unchanged. The Board
considers this performance to be a direct consequence of the
strategy we put in place at the time of Admission at the end of
last year and we look forward to reporting on further progress as
we move forward.
Sadly, I have to let you know that, unfortunately due to a
serious medical matter within his close family, which has become
acute in recent weeks, Jon Fenton has, regrettably, taken the
difficult decision to step down as Chief Executive Officer once a
successor has been appointed. The Board understands and supports
Jon's decision (which it emphasises is completely separate from Mr.
Ellis' actions) and I know you will join with me in sending Jon and
his family our very best wishes at this difficult time.
The Board will conduct a comprehensive and objective search
process to identify a new Chief Executive Officer who brings
relevant commercial, operational and strategic experience to the
Group and who can, together with the senior management team and the
other members of the Board, continue to take the business forward.
We are fortunate to have strength in depth across our management
team and whilst Jon has indicated that he will remain in post until
his successor is appointed, we have organised responsibilities
amongst the executive management team to ensure continuity and also
to allow Jon to take time away from the Company as required.
Van Elle is a business in good health, with a strong management
team and a strategy to grow over the medium-term.
2. REQUISITION OF GENERAL MEETING
On 13 November 2017, your Board announced that it had received a
requisition notice from Mr Michael Ellis to convene a general
meeting of the Company. Mr Ellis, along with his wife, two
daughters and a related family trust own, in aggregate,
approximately 20% of the Shares.
At the request of Mr Ellis, there are five resolutions to be
considered and voted upon at the General Meeting:
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 in the resolutions numbered 1 to 4 (inclusive)
above.
This letter sets out the reasons why your Board unanimously and
strongly recommends that Shareholders VOTE AGAINST the Ellis
Resolutions.
3. BACKGROUND
At the time of Admission on 26 October 2016, Mr Ellis was
non-executive chairman of the Company. Jon Fenton, who had been
appointed by Mr Ellis as Chief Executive Officer of the Group in
2010, continued in that role following Admission. As part of the
IPO, the Ellis Family Shareholders sold approximately 20.5 million
Shares, valued upon Admission at approximately GBP20.5 million, and
retained an aggregate holding of approximately 20% of Shares in the
Company. On 31 December 2016, a little over two months after
Admission, Mr Ellis, age 73, retired from the Board.
Thomas Lindup, Mr Ellis' son-in-law, left the Company on 6 March
2017, having been a director on the Board since April 2015. At the
time, your Board concluded that there was no need to directly
replace Mr Lindup on the Board.
Following his departure, Mr Ellis has corresponded with your
Board and sought face-to-face meetings, which your Board has
accommodated, recognising both his history with the Company and his
family's interest in the Company. Your Board has sought to have a
constructive engagement with Mr Ellis, on the same basis as it
would with large institutional shareholders, albeit recognising the
fact that the Company is no longer a private family business and
that it has responsibilities and obligations as an AIM quoted
company.
Given this approach, your Board is disappointed by Mr Ellis'
behaviour in proposing the Ellis Resolutions, which the Directors
consider serve to promote the interests of himself and his family,
not necessarily to the benefit of the Company and its other
Shareholders.
Over the course of the Board's engagement with Mr Ellis, he has
requested detailed information on the Company's strategic direction
and its trading performance, above that which is publicly
available. The Board believes that these requests reflect both a
refusal by Mr Ellis to acknowledge that the Company is no longer a
private family business in which he has majority control and a lack
of understanding of the rules related to quoted companies.
The Board believes that the recent actions of Mr Ellis are
driven more by his personal agenda than the interests of the
Shareholders as a whole. In addition, your Board considers Mr
Ellis' actions to be both disruptive and damaging to the Company,
its Shareholders and its stakeholders.
Your Board believes that the Ellis Resolutions are simply an
attempt by Mr Ellis to secure a greater level of control of the
Company against the recommendation of the Board.
Accordingly, your Board unanimously and strongly recommends
that you VOTE AGAINST the Ellis Resolutions, in order to allow
the continued delivery
of the Company's strategy set out at the time of its
Admission.
4. THE ELLIS RESOLUTIONS ARE UNWARRANTED AND SHOULD BE REJECTED
The Company's strategy remains unchanged and is being delivered
by the Board
Mr Ellis was non-executive chairman at the time of Admission in
October 2016, when the Company's strategy for growth was clearly
set out in the Admission Document. The strategy remains unchanged
and, since Admission, the Company has delivered good progress
including:
-- expanding its rig fleet;
-- broadening its range of specialist capabilities, techniques and services;
-- launching its new Scottish operation in January 2017,
manufacturing pre-cast concrete products and predominantly
servicing the Scottish market; and
-- completing and opening our modern training centre in Kirkby, Nottinghamshire.
The Company raised approximately GBP7.4 million of net proceeds
as part of its IPO, with the intention of undertaking selective
acquisitions to complement its organic growth plans. Whilst the
Company has investigated a number of potential targets, your Board
remains focused on ensuring that it makes the right acquisitions at
the right value and at the right time.
Given that this strategy remains unchanged from Mr Ellis' time
as non-executive chairman, the Board sees no merit in Mr Ellis'
concerns over the strategy.
The Company's trading performance is robust and its prospects
good
In its maiden full year results as a quoted company, Van Elle
reported record revenue and underlying* operating profit. For the
year ended 30 April 2017, Group revenue increased by approximately
11.8% to GBP94.1 million, with growth across all four divisions,
and underlying* operating profit increased by approximately 4.6% to
GBP11.6 million. In line with its stated intention to reward
Shareholders and to deliver value to them, the Company paid a total
dividend for the financial year end 30 April 2017 of 2.6 pence per
Share.
As announced today, this encouraging trading performance has
continued into the current financial period. For the six months
ended 31 October 2017, the Board anticipates reporting revenues of
approximately GBP53 million (H1 2016: GBP43.1 million), with
underlying* profit before tax increasing by approximately 15%. In
addition, the Board has confirmed that its expectations for the
year ending 30 April 2018 remain unchanged.
* Stated before share-based payments and exceptional costs.
Whilst Mr Ellis has sought to raise questions over the Group's
financial performance and prospects, the half year trading update
confirms further profitable growth by Van Elle and that the Board
is confident that the Group remains well positioned for continued
development into the future.
Mr Ellis has also suggested that staff turnover is high and
adversely impacting the business. The Board refutes this suggestion
completely and considers that the Ellis Resolutions are in fact
themselves damaging to staff morale. In addition, the Board
believes that the uncertainty caused by the Ellis Resolutions could
negatively impact the Company's ability to both retain and recruit
staff in the short to medium term.
The Board considers that the proposed directors would create a
less effective Board
Whilst Michael Ellis is the founder of the Company and a former
non-executive chairman, Jon Fenton, who was specifically brought
back into the business by Mr Ellis, has been Van Elle's Chief
Executive Officer since 2010 with full-time executive
responsibility for the day-to-day operations. Over this time, the
Group has grown significantly in scale and complexity, with an
increased workforce, capital base and number of services
offered.
The Board considers that the Ellis Resolutions are unwarranted
and that Mr Ellis' willingness to embark upon them, in spite of the
fact that they are, in the Board's view, disruptive and damaging to
the Company, forms a strong case as to why he should not be a
director at this time. Further, the Board considers that such an
appointment would adversely impact the effective day-to-day running
of the Company and not be in the interests of Shareholders as a
whole.
Mr Ellis' son-in-law, Thomas Lindup, was, prior to joining Van
Elle in 2015, a lawyer. The Board considers that whilst Mr Lindup's
previous legal experience was beneficial to the Group ahead of its
admission to AIM, following his departure in March 2017 the Board
was satisfied that his responsibilities could be absorbed by other
senior colleagues on the executive management team. Consequently,
the Board does not believe that Mr Lindup would bring any
complementary skills or experience to the current Board at this
time and the Board considers that this, together with the fact that
Mr Lindup cannot be considered to be independent from Mr Ellis and
his family, make his proposed appointment as a director
inappropriate and not in the interests of Shareholders as a
whole.
Since Admission in October 2016, the Board has been focussed on
continuing to enhance its corporate governance, building a
leadership framework which is both appropriate for a publicly
traded company and capable of supporting the Group as it continues
to grow. The Board believes that neither Mr Ellis nor Mr Lindup
would bring complementary skills or objective insight to the Group
at this time and further that their proposed appointment would be a
backward step in Van Elle's transition away from being a private
business dominated by the Ellis Family Shareholders.
Mr Ellis' actions could adversely impact the proper succession
process
The Board is initiating a formal process to identify the best
possible successor to Jon Fenton as Chief Executive Officer. As
part of this process, the Board is undertaking a comprehensive and
objective search process to identify candidates who would bring the
right commercial, operational and strategic experience to the Group
and Jon has kindly agreed to remain with the Company during this
time to ensure a smooth transition.
The Board is focussed on ensuring that this succession process
is conducted in the best interests of all stakeholders and without
impacting the Group's business. The Board believes that each of the
Ellis Resolutions, if passed, would be potentially damaging to this
process, deter potential candidates from coming forward and risk
de-stabilising the Group.
The Ellis Resolutions would weaken the corporate governance of
the Company
At the time of its admission to AIM, recognising that it was no
longer a private family business, the Company committed to and
adopted high standards of corporate governance. These actions
included the appointment of Adrian Barden and Robin Williams as
independent non-executive directors. The Board remains committed to
this approach and the independence of the Board has been further
strengthened by the appointment of David Hurcomb on 1 November
2017.
In the Board's view, the Ellis Resolutions would significantly
weaken the independence of the Board and the overall level of
corporate governance within the Company:
-- Mr Ellis and his son-in-law, Thomas Lindup, are not
considered by the Board to be independent given that the Ellis
Family Shareholders own approximately 20% of the Shares;
-- the Board considers that the Ellis Resolutions would
significantly reduce the level of knowledge and experience of
publicly traded companies on the Board, as the proposed removal of
Robin Williams would leave Adrian Barden as the only non-executive
director with significant experience of acting as a director of a
publicly traded company;
-- the proposed election of Mr Ellis and Mr Lindup would bring
collective experience of acting as a director of publicly traded
companies of approximately 7 months to the Board, compared to the
very experienced Robin Williams; and
-- Mr Ellis' proposal to remove Robin Williams would leave the
Company without an appropriately qualified independent director to
chair the Audit Committee.
Accordingly, the Board believes the Ellis Resolutions
demonstrate an alarming disregard by Mr Ellis of what is required
by a publicly traded company. The proposals would constitute a step
backwards from the properly constituted Board which he himself put
in place at the IPO to run the Company effectively and represent
the interests of all Shareholders.
In summary, the Board considers that the concerns of Mr Ellis
regarding the Company's strategy and its financial performance are
unfounded and that his proposed resolutions are both ill-thought
through and inappropriate for a publicly traded company.
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 the Board considers that the Ellis Resolutions serve
to promote the interests of Mr Ellis and his family, not
necessarily to the benefit of the Company, its Shareholders and its
stakeholders.
5. RECOMMATION
Your Board has spent time and effort engaging with Mr Ellis
since his retirement from the Board on 31 December 2016. As a
result, we are disappointed that he has requisitioned the General
Meeting which the Board considers disruptive and damaging to the
Company, its Shareholders and its stakeholders.
Your Board strongly believes that the Ellis Resolutions should
be rejected because:
-- the Company's strategy remains unchanged, with the Board
working to deliver such strategy;
-- the Company delivered profit growth in FY2017 and the Board's
expectations for FY2018 are unchanged;
-- the Board is engaged in an independent process to identify a
new Chief Executive Officer; and
-- they would significantly weaken the independence of the Board
and the overall level of corporate governance within the
Company.
The Board considers that the Ellis Resolutions reflect the
failure by Mr Ellis to accept that Van Elle is no longer his
private family business.
Accordingly, the Board unanimously and strongly recommends that
Shareholders VOTE AGAINST the Ellis Resolutions.
Yours faithfully,
Adrian Barden
Chairman"
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Admission Document" the document dated 21 October 2016 relating
to the admission of the Shares to trading on AIM
"AIM" the market of that name operated by the London Stock
Exchange plc
"Board" the current board of directors of the Company
"Company" or "Van Elle" Van Elle Holdings plc, a public limited
company registered in England and Wales with registered number
04720018
"Directors" the directors of the Company
"Ellis Family Shareholders" Mr Michael Ellis, Mrs Joan Ellis,
Mrs Julia Duffey, Mrs Suzanne Lindup and the MFE Discretionary
Trust
"Ellis Resolutions" or "Resolutions" the ordinary resolutions to
be proposed at the General Meeting (and set out in the Notice
contained in the Circular)
"Form of Proxy" the Form of Proxy enclosed with the Circular,
for use by Shareholders in connection with the General Meeting
"General Meeting" the general meeting of the Company to be held
at noon on 15 December 2017 (and any adjournment thereof) for the
purposes of considering and, if thought fit, passing the
Resolutions
"Group" the Company and its subsidiaries
"IPO" or "Admission" the admission of the Shares to trading on
AIM on 26 October 2016
"Notice" the notice of the General Meeting set out on pages 16
to 18 (inclusive) of the Circular
"Requisition Date" 10 November 2017
"Shareholder" a holder of Shares
"Shares" the ordinary shares of GBP0.02 each in the capital of
the Company, having the rights set out in the articles of
association of the Company
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"pence", "pounds sterling",
"sterling", "GBP" or "p" the lawful currency of the United Kingdom
All times referred to are London time unless otherwise
stated.
All references to legislation in this announcement are to the
legislation of England and Wales unless the contrary is indicated.
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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