Big hitters at Lakehouse (LAKE:AIM) are slugging it out over who is best to lead the energy and housing contractor out of its current slump.
Shares in Romford-based Lakehouse have fallen 45% since a March 2015 initial public offering (IPO) because of a profit warning in February.
Fund management group Slater Investments, which has a 6.1% stake in Lakehouse, wants to return founder Steve Rawlings to the board and lead a turnaround.
But board members at Lakehouse oppose Slaters’ plans, claiming current chief executive Stuart Black – not Rawlings – is responsible for building the business prior to IPO.
While a director, Rawlings did not attend board meetings between 2012 and 2015, Lakehouse’s board says in a shareholder circular released today.
‘Notwithstanding this absence from the boardroom, it appears to your board that the requisitionists are implying that Steve Rawlings should take sole credit for the trading performance and growth of the Group since 2008,’ says the document.
‘As set out in the Circular, in 2008 Stuart Black was invited by Steve Rawlings to formulate a new business plan and growth strategy for the Group.’
Revenue increased more than six-fold under Black’s tenure, the document says, and grew three-fold in the period Rawlings was not involved.
'The subsequent near tripling in the Group’s reported turnover to in excess of £300 million between 2011 and IPO was actually achieved under the stewardship of Stuart Black and the existing management team rather than being due to Steve Rawlings,' the document says.
But Rawlings says he is worried about the company's performance after a February trading update which said social landlords were delaying contract awards and a hoped-for ramp up in smart metering installations has not materialised.
‘I founded Lakehouse in 1988 and have become deeply concerned by recent events as my family has a substantial investment in the company,’ said Rawlings, who has a 15.5% stake in the business, on 1 April.
Rawlings is one of three proposed non-executive appointments that would replace existing board members under Slater's plans.
Accountant Ric Piper and Robert Legget, managing director of Progressive Value Management (PVM), are the other two proposed candidates.
Legget's PVM ‘specialises in creating value and liquidity for institutional investors from illiquid holdings in underperforming companies’, says a Slater Investments press release published on 1 April.
Lakehouse says the appointments will reduce the board's independence and would mean it no longer complied with the UK Corporate Governance Code.
A general meeting will be held on 19 April at 2.30pm at the offices of Eversheds, One Wood Street, London.