Lakehouse Share Discussion Threads

[edmondj] 01/4/2016 07:19

So it's effectively an issue of trust, than knowing exactly what has happened and what action to take:

"we believe that they will focus initially on the critical questions of what has gone wrong at Lakehouse and how best to get the Company back on track."

[masurenguy] 01/4/2016 07:17

Slater Investments Ltd
EGM Statement
RNS Number : 7965T
01 April 2016

On 31st March 2016 Slater Investments Limited and Steve Rawlings issued a statement to Lakehouse shareholders commenting on the proposed Extraordinary General Meeting to be held on 19th April 2016. Mark Slater of Slater Investments commented "We have requisitioned this General Meeting to address the serious governance deficit on Lakehouse's Board with a view to restoring shareholder value through the proposed appointment of the new Non- Executive Directors. The Board has attacked the proposed candidates in its circular to shareholders despite making very different noises in private and has argued that if we are successful the newly configured Board will not be compliant with the UK Corporate Governance Code. The proposed candidates have committed to addressing the balance between Executive and Non-Executive directors in due course. However, they will initially focus on far more important issues. Corporate governance is not just about box-ticking."

Steve Rawlings commented "I founded Lakehouse in 1988 and have become deeply concerned by recent events as my family has a substantial investment in the Company. The business has great potential and I hope to be able, along with Ric Piper and Robert Legget, to help get Lakehouse back on track and then to fulfil its considerable potential."

Shareholders are urged to vote in favour of the resolution

Thursday, 31 March 2016

Dear Lakehouse Shareholder,
You received a notice of seven ordinary resolutions to be considered, and if thought fit, passed at the forthcoming requisitioned General Meeting of Lakehouse plc ("Lakehouse" or "the Company") at the offices of Eversheds at 1 Wood Street, London EC2V 7WS on 19th April 2016 at 2.30pm. We have called a General Meeting to address the serious governance deficit on the Board by proposing the appointment of individuals with the skills necessary to assist the executives in restoring shareholder value. We ask you to support our resolutions to remove three Non-Executive Directors and replace them with three very capable candidates - Steve Rawlings, Robert Legget and Ric Piper.
Please vote in favour of all resolutions.

Why are we taking action now?

Lakehouse's history as a public company is short and disappointing. Lakehouse listed on 23rd March 2015 at a price of 89p per ordinary share. On 10th December 2015, Stuart Black, at the time the Company's Executive Chairman, reported that "the Board remains confident for the current financial year." Only eight weeks later, on 1st February 2016, the same Board issued a major profit warning. The share price fell 58% from 84p to 35p. Since we requisitioned this General Meeting the shares have rallied a little. We do not believe that the Board has a firm grip on the Company and its prospects. We believe that our three candidates for the Board will bring much needed perspective, experience and energy to the Company and enable it to realise its potential. We believe the proposed candidates will be able to identify quickly action that is needed and to develop, with the executives, a strategy to restore shareholder value.

The Board Response to our action

The Board's response to our calling a meeting of the shareholders was received badly by the stockmarket. Crucially, the Board did not address its own disastrous stewardship of Lakehouse and failed to offer any positive reasons why it deserves your support. Instead, the Board questioned the suitability of the individuals we proposed. Privately, however, the Board thought differently and decided two of them were suitable as Non-Executive Directors in the event we abandoned the Requisition.

The new Non-Executive Directors

Steve Rawlings has demonstrated a lifetime of successful entrepreneurship and accomplishment. In 1988 he founded Lakehouse leaving the Board in 2015 following a successful flotation on the London Stock Exchange with a turnover of over £300M. He is also the founder and lifetime president of Building Lives Foundation - a charitable trust delivering training and jobs in the construction industry to hundreds of unemployed Londoners. His achievements have been recognised by numerous awards, including Building Contractor of the Year (twice), two Queen's Awards and inclusion in the Sunday Times top 100 best companies to work for. Steve remains the largest shareholder in Lakehouse and has spent most of his working life developing its business. He is, therefore, both highly motivated and very well qualified to help restore value.

Robert Legget co-founded Progressive Value Management Limited in 2000 and is Managing Director. His firm specialises in creating value and liquidity for institutional investors from illiquid holdings in underperforming companies. In this role he has had significant engagement with public company boards. He was a director of Quayle Munro Holdings plc and Foreign & Colonial Private Equity Trust plc. We believe his experience in turning around underperforming companies will be of considerable value to the Company.

Ric Piper qualified as a Chartered Accountant in 1977. His current directorships include being Senior Independent Director at Matchtech (since 2006) and Waterman (since 2013). He has held senior finance roles in ICI, Citicorp and Logica, becoming Finance Director of Logica (UK). He was Group Finance Director of WS Atkins from 1993 to 2002. He has been involved at Board level and has advised on the growth and development of Main Market, AIM and privately owned companies. Ric is a partner at Restoration Partners and a member of the Financial Reporting Review Panel. His broad-based experience as a non-executive director and of growing and developing companies will, we believe, be invaluable to Lakehouse.

What will the new Non-Executive Directors do?

If the individuals we have nominated are elected to the Board, we believe that they will focus initially on the critical questions of what has gone wrong at Lakehouse and how best to get the Company back on track. This is the best way to restore shareholder value. They have also committed to addressing, in due course, the ratio of executive and Non-Executive Directors to ensure compliance with best practice and the UK Corporate Governance Code.

What action should shareholders take?

We urge you to vote in favour of all seven resolutions to be proposed at the General Meeting as we intend to do in respect of 33,968,128 Ordinary Shares of 10 pence each held by us (21.56 % of the issued share capital). We believe that the approval of these resolutions will greatly enhance the chances of improving the value of Lakehouse for the benefit of all shareholders.

Yours faithfully,

Steve Rawlings of Building Lives Training Academy, The Gateway Centre, 66 Lancaster Street, London SE1 0RZ
Slater Investments Limited of Nicholas House, 3 Laurence Pountney Hill, London EC4R 0EU

For comments please contact Steve Rawlings on 07860 435 999 or Lisa Letham from Slater Investments Limited on 020 7220 9460.

[edmondj] 01/4/2016 07:14

Following the publication of Slater's letter, neither side appear to be detailing specifics for the business, essentially "trust us instead of them" which is a bit disappointing frankly. As shareholders will have to vote ahead of the EGM, a majority won't be able to wait for any discussion. (Not a holder.)

[davidosh] 31/3/2016 14:30

That is the problem with nominee accounts. You either receive nothing until it is too late or when the company need you they pay out a load of money to find you then sent very biased paperwork directing you to vote with them or to be able to use your vote on their behalf...totally loaded !

I have requested that all the independent shareholders which probably also equates to 15% of the votes should be able to put forward a truly independent NED to add balance. In fairness I think Steve Rawlings is totally entitled to be on the board or represented as he has over 20% along with family members.

That said it is strange that with Steve Rawlings having his wealth tied up here in LAKE it is unusual that he decided not to take a close interest for the last few years. Maybe he has been so passionate about other things in his life and thought the ship was being well run and on course without him !?

My personal aim here is to get this settled without the need for an EGM and to stop all this public fighting which can only weaken the company position and allow competitors for future work to take advantage.

[norbert colon] 31/3/2016 14:10

I have also received the said letter. Personally a vote either way is difficult for me as I have not yet met the management of LAKE and have only recent negative events to guide me. I do, like a lot of investors, have a lot of respect for Slater Investments however and I know Ric Piper from his ATKINS days and also as a current NED for Waterman (WTM). Currently I feel obliged to abstain from voting as I do not have conviction either way at present.

I would welcome any specific thoughts from others on this thread re: the comments given by the current BoD about Steve Rawlings. I have to agree that his large shareholding and prior history does not make him independent and hence not an ideal NED in any respect.

[blueliner] 31/3/2016 13:24

Unprecedented intrusion that the BoD have seen fit to squirrel around & unearth my nominee holding and send me the same letter of instruction as received by sharw.

[sharw] 31/3/2016 11:20

This morning I have received a letter from a proxy consultant company employed by LAKE enclosing a "letter of instruction" to my nominee. The letter only gives me one option - to vote against all resolutions. It is to be sent back to the proxy consultants.

Sounds as if the board are desperate - but what is all this costing?

[paulypilot] 31/3/2016 02:20

Slater & the founder should not be airing dirty laundry in public like this. It's counter-productive & generally a bit puerile. This dispute needs to be sorted out now. The company's response was dreadful too, I thought. Nobody is gaining in reputation from this silly spat. Get it sorted out.

[cerrito] 30/3/2016 22:01

Got called by a lobbyist for Management today
Also something in the Evening Standard yesterday saying Rawlings motives was to get the better tax treatment on his shares he would get if he was a director which Rawlings' spokesperson denied saying if I remember right he would be lucky to have a profit the way things are going.

[vfast] 25/3/2016 21:50

Article on Shareprophet. They appear to support the Slater intervention.

Lakehouse – EGM requisition, I chat to Mark Slater who is driving for boardroom change.

Having listed at 89p per share less than a year ago and updated in its December-published annual report that “the board remains confident of its expectations for the current year and the future”, shares in Lakehouse plc (LAKE) crashed on the back of a 1st February “Trading Statement” including that “the group now expects the financial outturn for the current year to fall short of its previous expectations and to see a reduction on last year's profit level”. Now Slater Investments and Steve Rawlings have requisitioned an EGM to remove the non-executive directors and replace them with Rawlings, Ric Piper and Robert Legget.

Rawlings is the founder of the business and a 15.5% shareholder, Piper an experienced non-executive and former Finance Director of fellow support services company WS Atkins and Legget Managing Director of London-based fund management group Progressive Value Management.

Slater Investments is a high-performing investment management company led by Mark Slater. It took a 5.9% shareholding in Lakehouse on IPO and, together with its action in now seeking boardroom change rather than selling its shares, clearly considers there a decent business here which is currently being run far from optimally.

The swift downturn in trading prognosis from Lakehouse between its December annual report statement and 1st February profit warning certainly looks to support the latter.

For other investors, it now looks a case of awaiting developments here – Lakehouse stating “further announcements will be made in due course”, whilst having within 21 days of receipt of the requisition to call the EGM and to provide for the meeting to be held not more than 28 days after the date of the notice.

The recent poor trading performance of Lakehouse and poor guidance from the current management suggest caution. However, the track record of Slater and credentials of the proposed new non-executive directors suggest this could become interesting in the near-future. At worst, on the watchlist.

hxxp://www.shareprophets.com/views/19345/lakehouse-egm-requisition-i-chat-to-mark-slater-who-is-driving-for-boardroom-change

[battlebus2] 25/3/2016 15:23

Thought they mainly played an overseeing role myself...

[nurdin] 25/3/2016 14:09

Is it the role of NEDS to develop plans for the company? I thought that was the function of the main board.

[masurenguy] 25/3/2016 13:12

Under-fire Lakehouse calls on Mark Slater to reveal plans

Social housing contractor says rebel shareholders led by star fund manager Mark Slater have failed to detail their plans for the company.

Under-fire social housing contractor Lakehouse (LAKE)has dismissed the shareholder revolt led by star fund manager Mark Slater, arguing its agitators have failed to provide any details on their plans for the company. Lakehouse has issued a circular to shareholders urging them to vote against proposals from Slater, a major backer of the company, and Steve Rawlings, Lakehouse's founder, to replace the company's three non-executive directors. Slater and Rawlings are calling for Chris Geoghegan, Jill Ainscough and Jonathan Ford to be removed from the board. Rawlings is putting himself forward as a non-executive, alongside Ric Piper, former finance director at engineering group WS Atkins (ATKW) and activist investor Robert Legget, managing director of fund group Progressive Value Management.

Lakehouse has accused the Slater and Rawlings of failing to provide any information on their plans for the company. 'If the requisitionists have a clear plan, let's hear it. That's all we are asking for,' said chief executive Stuart Black. 'We haven't seen any evidence of a plan for what they want to do.'
Citywire AAA-rated manager Slater holds Lakehouse in his Slater Growth and Income funds, having bought the company when it floated last year. Since then, shares in the company have halved, after it warned last month that profits were likely to fall this year as social housing landlords hold back on spending. The shares fell a further 7%,to 45p today as investors digested the circular. Black claimed he had been in dialogue with Slater Investments up until yesterday and had proposed compromises, but they had been rejected by the fund group. 'I find an irony that Mark Slater is a champion of the small company business and he is the one putting us under significant pressure. My only disappointment is this whole process is taking our attention away from dealing with those external challenges.'

Lakehouse also launched an attack on Rawlings, claiming his track record as a director since 2012 'does not suggest that he has the necessary skill set to provide a meaningful contribution to the board or group going forward'. Although nominally "chief executive", Steve Rawlings did not attend a single board meeting during the three years prior to the initial public offering 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,' said the board in its circular. Lakehouse also questioned whether Piper would be able to devote enough time to Lakehouse alongside his other director positions and said Legget lacked listed company board experience. Chairman Chris Geoghegan added that the three replacements put forward for the board would 'result in all the non-executive directors representing only one particular group of Lakehouse shareholders in preference to other Lakehouse shareholders'.

Slater Investments said in a statement: 'We note the statement from the board and we will be releasing our letter to Lakehouse shareholders shortly'.

[salpara111] 24/3/2016 14:44

All a bit of a mess but when the dust settles there will probably be a good opportunity.
I looked at this when it came to market but felt the valuation was a bit rich for me so I passed but once the current spat is over I can see an attractive valuation.

[vfast] 24/3/2016 14:43

We've only heard one side of the storey from their RNS today however there are always two sides to an argument and we haven't yet heard from Slater and Co.

The present BoD’s have been naïve/silly making statements when they came to market which have been totally inaccurate and even 6/7 weeks before they announced the profit warning they said everything was still on track. So how can we believe anything that the present BoD’s are telling us now?

IMO Slater and Co are investors and will want to create value which is beneficial to all shareholders.

My guess is that other major shareholders will want the same and support the actions to remove the NED’s and I wouldn't be surprised if the other major shareholders have already given support to the present action.

At this stage I support the Slater intervention because of the reasons mentioned above and the present BoD’s have loss credibility and that is the main reason why we saw the share price drop from around 90p to 35p and the City will take any future earnings forecasts off these guys with a very large pinch of salt!

[cerrito] 24/3/2016 14:30

Specuvestor contact your nominee who will provide you a letter of representation so you can attend and vote or will vote as per your instructions if you cannot make it

[rivaldo] 24/3/2016 14:30

Today's RNS says prominently:

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

[modform] 24/3/2016 13:49

Steg, the problem is that nobody is going to believe the earning forecast, I won't be surprised of another profit warning in near future, that's the problem with poor corporate governance

[specuvestor] 24/3/2016 13:44

Does anybody know the procedure for attending the EGM if shares are held in a nominee account? My holding is in a self invested ISA account.

[stegrego] 24/3/2016 10:47

They'd be pretty stupid to sell on 4x earnings though

[nurdin] 24/3/2016 10:32

I agree. The only risk to other shareholders is that Slater and & co may decide to dispose of their holdings if they dont get their way.

[pj 1] 24/3/2016 10:25

I agree nurdin. The CEO showed real bottle imo at the presentation, mingled before and after the presentation.

Whilst in many ways I support Slater in what has been done I hope he has his facts right and can guide the Co where he sees fit (which seems the intention), or Slater will be responsible for devaluing the Co and wasting time and funds. The main worry for me is that the BoD are going to be seriously distracted by this.

[nurdin] 24/3/2016 10:16

The BOD appear determined to put up a robust fight....