SUR.L Regulatory News (SUR)

24 March 2016

Lakehouse plc

Publication of Shareholder Circular

Lakehouse responds to the resolutions proposed by Slater Investments Limited and Steve Rawlings

Following the announcement made by Lakehouse plc ("Lakehouse" or the "Company") confirming receipt of a notice requisitioning a general meeting of the Company from Slater Investments Limited and Steve Rawlings on 9 March 2016, the Company is today publishing a circular to Lakehouse Shareholders containing a letter from the Chairman to Lakehouse Shareholders (the "Circular"). The letter details the Board's response to the Requisitionists' resolutions and the Board's unanimous recommendation to vote AGAINST the resolutions.

The Resolutions will be put before Lakehouse Shareholders at the Company's forthcoming General Meeting at 2.30p.m. on 19 April 2016 at the offices of Eversheds LLP, One Wood Street, London, EC2V 7WS.

In summary, the Board recommends that Lakehouse Shareholders vote against the Resolutions for the following reasons:

· The Requisitionists have not provided any information in relation to their strategic vision for the Company

· An independent Lakehouse Board, without any significant shareholder representation, represents the best corporate governance structure for Lakehouse Shareholders 

· Steve Rawlings' lack of involvement in the Group and track record as a director since 2012, together with his lack of experience as a director of listed companies, does not suggest that he has the necessary skill set to be able to provide a meaningful contribution to the Board or the Group going forward

· The Requisitionists' actions have caused unnecessary disruption to, and uncertainty within, the operations of the business at a time when the Board wants to focus on the trading performance of the Group

Commenting on the proposed resolutions, Lakehouse's Chairman, Chris Geoghegan, said:

"We urge all of our Shareholders to consider carefully the Circular that we have published today.

"Your Board is particularly concerned that the Requisitionists have not provided any information in relation to their strategic vision for the Company. Their silence on this important matter is especially concerning given they are asking to remove every single Existing Non-Executive Director and to replace them with their own candidates.

"The Requisitionists' proposals would reduce the level of independence on the Board, damage the Company's compliance with the UK Corporate Governance Code and result in all the non-executive directors representing only one particular group of Lakehouse Shareholders in preference to other Lakehouse Shareholders.

"Accordingly your Board unanimously recommends voting against the Resolutions.

"The Board confirms that the Company remains on track to deliver its revised expectations for the current financial year."

All terms used within this announcement will have the same meaning as applied within the Circular and are defined at the end of this announcement.

- Ends - 

Reasons to VOTE AGAINST the Resolutions extracted from today's Circular

On 9 March 2016, your Board announced that it had received a notice from Slater Investments Limited and Steve Rawlings, both Lakehouse Shareholders, requiring the Company to convene a general meeting to consider resolutions to remove the three Existing Non-Executive Directors of the Company, being Chris Geoghegan, Jill Ainscough and Johnathan Ford, and to replace them with the three Alternative Non-Executive Directors, being Steve Rawlings, Ric Piper and Robert Legget. In addition, a further resolution was proposed to remove from office any person appointed by the Directors as an additional director pursuant to the Company's Articles of Association between the date of the requisition and the conclusion of the General Meeting.

The purpose of the Circular to be posted to Lakehouse Shareholders today is to explain why the Board unanimously recommends that Lakehouse Shareholders VOTE AGAINST the Resolutions.

A summary of the reasons for the Board's recommendation to vote against the Resolutions is set out below:

· The Requisitionists have not provided any information in relation to their strategic vision for the Company

o Your Board has a clear and established strategy to grow the Lakehouse business based on organic growth and targeted, value-enhancing acquisitions

o Slater Investments Limited bought into this strategy at the IPO and supported it at the recent AGM

o The Requisitionists have not provided any alternative strategic vision for the Group

o The Board believes the lack of any information as to the Requisitionists' plans exposes Lakehouse Shareholders to unknown strategic changes and has already damaged Lakehouse's commercial reputation

· An independent Lakehouse Board, without any significant shareholder representation, represents the best corporate governance structure for Lakehouse Shareholders

o Your Board believes in the value of corporate governance and in maintaining an effective and diverse board of directors

o  Lakehouse is recognised as having good governance practices

o Your Board already has three independent, skilled and experienced non-executive directors recruited through a rigorous process, and is currently seeking a fourth

o In contrast, the Requisitionists' proposals would damage the Company's corporate governance structure, significantly reduce independence on your Board and ensure all non-executive directors were the Requisitionists' candidates, thereby providing a voice to a particular group of Lakehouse Shareholders

o There is a concern as to whether Ric Piper would be able to devote sufficient time to Lakehouse (he is currently a partner at Restoration Partners Limited and already holds three non-executive directorships at other listed companies)

o Your Board notes the relative lack of listed company board experience of Robert Legget

· Steve Rawlings' lack of involvement in the Group and track record as a director since 2012, together with his lack of experience as a director of listed companies, does not suggest that he has the necessary skill set to be able to provide a meaningful contribution to the Board or the Group going forward

o Although nominally "Chief Executive", Steve Rawlings did not attend a single board meeting during the three years prior to the IPO and did not have any involvement with the board decisions taken relating to the strategic direction of the Group and its day-to-day operations

o The Group has grown significantly and is now very different to when Steve Rawlings was actively involved in it: he has played no part in developing and executing the strategy that delivered that growth

o He has limited experience of the two main, higher margin, growth areas of the Group's business, Compliance and Energy Services, and has had little involvement in the Construction and Regeneration divisions for nearly five years

o Steve Rawlings would not be an independent director and has no listed company board experience making it difficult to justify his appointment based upon the criteria required by the UK Corporate Governance Code

· The Requisitionists' actions have caused unnecessary disruption to, and uncertainty within, the operations of the business at a time when the Board wants to focus on the trading performance of the Group

o Slater Investments Limited voted in favour of the re-election of all Existing Non-Executive Directors and Steve Rawlings voted in favour of the re-election of Chris Geoghegan and Johnathan Ford at the recent AGM, only four days after the Trading Statement

o The Requisitionists' actions have caused operational disruption and uncertainty amongst, and had a destabilising effect on, the Group's executive management team and other Group employees, customers, suppliers and other partners and stakeholders

The Circular will be posted to Lakehouse Shareholders today, 24 March 2016. A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.hemscott.com/nsm.do and on the Company's website at www.lakehouse.co.uk.

The timetable for the General Meeting is as follows:

For more information please contact:

Notes to editors 

Lakehouse plc is an asset and energy support services group that constructs, improves, maintains and provides services to homes, schools, public and commercial buildings with a focus on the UK public sector and regulated markets. The Group was founded in 1988 and is headquartered in Romford, Essex. It employs more than 2,400 staff from 35 offices throughout the UK.

We deliver services through four divisions:

· Regeneration, which provides planned refurbishment, repair and maintenance and a growing responsive maintenance offering, for social housing providers

· Compliance, which delivers a range of regulated and legislated services, primarily to local authority and housing association clients

· Energy Services, which provides domestic insulation, energy efficiency products and advice, primarily for social housing landlords, five of the "Big Six" energy utility companies and the key independent energy companies

· Construction, which delivers extension, refurbishment, rationalisation and new build works, primarily in the education market and with a particular focus on schools

Definitions

The following definitions apply throughout this document unless the context otherwise requires: