Speak with forked tongue..30 Mar 2011 09:10
The de-listing has come with some surprise and in hindsight should have been foreseen, but it could have been different. There is no reason why an acquisition trail could have been pursued more aggressively, after all there are dozens of similar companies out there with an extremely good business model but lacking access to funds and corporate expertise, Strontium directors have access to both these commodities, and with venture capital funding freely available, suitable bolt on acquisitions could have been funded by the issue of shares, because that is what listed companies are supposed to do, isn't it? grow and provide shareholder value. At the A G M we discussed with the Board at length the possibilities, post cancelling of the share premium account, the two options of buy back and stock re-purchase, minority shareholders wanted a dividend, Directors were more keen towards buy back, it was even suggested that either Miad ( increased its profits by some 135%) or T L E (managed to turn a loss of £297k into a profit of £238k) as at 30th June, after looking at their respective accounts, it could have been possible to be hived or floated off, both these options quickly discounted at the A G M. What has caught the Directors by the shorties is that, instead of possibly investing their monies in supporting the company by way of loans, or possibly take salaries in new issued shares, they started to buy up the stock, leaving little of an already existing small i s c in the bin for ordinary investors, this caused the "city" to shun the stock and effectively close the door on any meaningfull corporate investment, thus leaving the directors holding the baby so to speak and the consequent squeeze on the remaining issued share cap . I am not that convinced de-listing is the only option. If it is just a matter of the listing costs that has caused this de-listing decision, after all the directors ought to have known how much it was going to cost to remain listed and could cut the corporate cloth to suit sooner, a decision to de-list just could not happen between the A G M and now in view of the matters discussed at the A G M, these decisions take a while in the planning. Let this be a lesson learned in the continuing quest for shareholder value amongst relatively small listed companies without the corporate support of the supposed listing status is supposed to provide.
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