(Reuters) - Activist investor Crystal Amber called on Monday for a shareholders’ meeting of struggling British commercial vehicle rental company Northgate to remove its chairman Andrew Page from the board.
Crystal Amber is the fourth biggest shareholder in the company, with a 6.3 percent stake according to Refinitiv data, and blamed Page for Northgate’s poor performance.
Northgate, which operates in the United Kingdom, Ireland and Spain with about 95,000 vehicles available on hire as of the end of January, has seen a decline in underlying earnings over the last three years.
Crystal Amber said Page, who has been chairman since 2015, “has been the principal driver of Northgate group’s lacklustre performance, both operationally and in generating value for shareholders”.
“During Page’s tenure as chairman, between the first half of FY16 and the first half of FY19, Northgate’s operating profit fell by 29 percent and its return on capital employed dropped from 12 percent to 6.7 percent,” the investment fund said in a statement.
Northgate’s share price, which has seen little movement over the past year, jumped after Crystal Amber’s statement and closed up 3.6 percent at 379.4 pence.
“We’ve been extraordinarily patient but no longer can we stand by and see the business being hampered,” said Richard Bernstein, investment adviser to Crystal Amber Fund in an emailed statement to Reuters.
“We have attempted to engage repeatedly and constructively with the Northgate board as a major shareholder since 2016,” Bernstein added.
The investment fund proposed appointing Northgate’s former chief executive Steve Smith to the board as a non-executive director. Smith left the company in 2010 after helping the company navigate the downturn caused by the financial crisis.
“At this point in time, the board acknowledges that message, the requisition and a certain statement will be made in due course,” a spokeswoman for Northgate said in response.
Reporting by Justin George Varghese and Samantha Machado in Bengaluru and Maiya Keidan in London; Editing by Arun Koyyur and Susan Fenton