German asset manager Shareholder Value Management, which owns 8.93% of Mears Group’s issued share capital, has forced an emergency general meeting to oust Mears Group PLC Chairman Bob Holt and appoint new non-executive director (NED), Andy Hogarth.
On behalf of the fund, SVM has filed the relevant papers with Mears Group. It argues the removal of Holt and appointment of Hogarth will create the right environment for the company’s CEO, David Miles, and his executive team to continue building the core business and improving shareholder returns. SVM remains very supportive of the current executive team and believes that their operational skills, alongside the experience of a newly appointed and independent chairman, with a brilliant track record, can successfully drive value creation for shareholders going forward.
SVM has concerns with the company’s capital allocation track record, the current board dynamics, the chairman’s time commitments and the board’s lack of shareholder engagement. It further argues that the Chairman’s lack of independence – clearly not best practice – is, in its view, the principal cause for ongoing share price underperformance.
A spokesperson for Shareholder Value Management AG, said: “We believe that the chairman of the board of Mears Group has continually failed to challenge the status quo and to remedy the situation, despite deteriorating results, a stagnant share price and faded shareholder value. In our conversations with the company, it has become clear that the current chairman lacks the will to enact much needed change that only a new independent chairman can bring. It is our view that Mr. Holt has become an impediment to the effective running of the company.”
Hogarth joined Staffline Plc as finance director in November 2004 and became CEO in 2009. Under his leadership, Staffline grew revenues and profitability at a compounded annual rate of approximately 30% with annualized returns to shareholders in excess of 50%.
He has held senior roles in a wide range of businesses including retail, support services, healthcare, hospitality and construction. He led the MBO and subsequent trade sale in 2002 of Pipeline Constructors Group, a £100m utility services business. Hogarth is entirely independent of SVM.