Archant: rapid-expansion policy
Rebel Archant shareholder Lord Lucas has warned that the Norwich-based newspaper business could become “another Marconi”.
And he has urged his fellow shareholders to bring about an end to the company’s stated policy of doubling in size. Marconi is the defence contractor whose share price collapsed from £12 to 3p after a disastrous expansion into telecoms in the late Nineties.
Lucas, a freedom of information campaigner who owns 30,000 Archant shares, has written twice to fellow shareholders urging a review of the company’s direction.
Archant is a private company with shares mainly allocated between various members of three families. There is also an employee share scheme which brings the total number of shareholders to more than 1,800.
Lucas, who has written to most of them, outlining his fears, said: “There has been a great deal of interest and not much opposition. “The company is currently being run in what I would call a high-risk manner.”
Archant has grown rapidly in recent years and owns four regional newspaper companies, 61 weeklies and a number of contract and regional magazines.
Lucas disagrees with the company policy of rapid expansion and wants to bring about a change of direction. He said: “Most of us, I believe, are not unperturbed by the prospect of losing everything if Archant fails. If Archant has to travel a risky road, then we must be allowed to lessen the risk for ourselves (for instance, and this is just one possibility, by selling some of our shares at a fair price).”
Under the current system Archant shareholders can sell their shares back to the company for around £10. Lucas believes the true value of the shares is around £30.
A company spokesman said: “We are aware that one shareholder is active in criticising the company record, however over the past 10 years publishing turnover has grown compound by 9 per cent a year, profit has grown compound by 27 per cent a year, dividends have grown compound by 13 per cent a year and the share price has grown compound by 18 per cent a year.
“The company is also much larger than it was 10 years ago and now publishes 103 titles compared to less than 50 titles 10 years ago. “In addition, the company is in a strong financial position with adequate cash reserves.
“The board believes that this longterm record of growth in shareholder value has been in the best interests of the shareholders and that it is following the right strategy of continuing to invest in making the business stronger.”
By Dominic Ponsford