No Pain, No Gain: Universal looks set to go forward in reverse
Saturday 05 March 2005
White Nile, the controversial oil minnow, and
Universal Direct, a little reseller of discounted electrical goods, are not too difficult to find.
Similarities between White Nile, the controversial oil minnow, and Universal Direct, a little reseller of discounted electrical goods, are not too difficult to find. Their shares have been suspended after enjoying spectacular performances ahead of what should be transforming acquisitions. And both companies are headed by well-known City personalities.
White Nile, with ambitions in the Sudan and run by former Test cricketer Phil Edmonds, soared from 10p to 138.5p in a few days, before trading was halted; Universal, where top City spin doctor David Wright is in command, surged from 10.5p to 35p in little more than a month and dealings were then frozen. I realise that the Universal gain pales into insignificance when compared with the incredible goings-on at White Nile but, nevertheless, such an advance is quite staggering and deserves more than passing admiration.
Just how long White Nile shares are due to remain in the investment wilderness is not known. Universal has high hopes of returning to the stock market in April. When it does re-appear, it will be a very different animal from the one that Mr Wright moved to as chairman last month.
The company had already seen colourful times. It was once AH Ball, a pipe-layer. Then the fund manager Edward Adams arrived and it re-emerged in the internet boom as MediaInvest. It quickly became one of the dottier stars of the madcap dotcom spectacular. From a capitalisation of £1.5m, it grew into a £250m enterprise with its shares hitting a remarkable (and no doubt unrepeatable) £58.
Reality returned as the dotcom mania subsided. The shares crashed and Adams, who has become a revamp specialist, embarked on another reinvention, turning MediaInvest into Universal Discount and buying the electrical reseller as well as a pet food business. Then along came one Wayne Sharpe to entertain the group's long-suffering 1,500 shareholders. Mr Sharpe built a 16 per cent interest; Mr Wright picked up a 17 per cent stake and serial investor Bob Morton clambered on board, buying a 12 per cent involvement. Mr Adams retained about 12.5 per cent.
It became apparent that a major deal was being hatched. But nobody was talking. The clue, however, was provided by the presence of Sharpe. He is the man behind Bartercard International, an Australian creation aimed at small and medium-size businesses. It now has 70,000 members spread across 20 countries and seems to be on a roll.
Universal is buying Bartercard in exchange for shares. In every sense, it is a reverse takeover with 217 million shares (priced at 30p) being used as takeover ammunition. The deal values Bartercard - its shareholders will have 95 per cent of the enlarged group - at £65m. Quite a coup for the 60-year-old former financial public relations man who started his City career at the Financial Times, then went into PR and played a major role in the creation, through acquisitions, of Incepta, the powerful Citigate Dewe Rogerson group. Incepta, with a capitalisation of £122m, is now involved in takeover talks with rival Huntsworth.
Mr Wright, who resigned as chairman of the PR giant in February last year, will continue to head the group with Mr Sharpe, who founded Bartercard in 1991, as chief executive.
The deal will transform Universal, which, as befits the stock market element in a reverse takeover, is loss-making, into a profitable enterprise. For Bartercard made profits of nearly £1m in the year to last June. The British operation has experienced difficult times but is expected to break even in the current year.
The Sharpe recipe is, like so many successful off-beat business developments, relatively simple. It is a form of barter exchange. Traders swap goods, either directly or by using Bartercard points, without the tiresome requirement of involving old-fashioned cash. For many traders, therefore, it has cash-flow advantages.
There are, as far as I am aware, no profit forecasts floating around the City for this latest reincarnation of the old AH Ball, which, I recall, enjoyed quite an eventful stock market life. But Mr Wright has set himself the task of eliminating losses at Universal's two rather disparate businesses and hopes they will soon be profitable.
So, with Bartercard seemingly set to make further progress, the combined group should, with a little luck, be riding well above the £1m profits mark in its next year. And I would not be surprised, now the old spin doctor has recaptured the takeover bug, to see the group padding along the acquisition path again in the not too distant future. After all, when he arrived at Universal, Mr Wright said he was "exploring one or two acquisition opportunities". I wonder if another is still in his sights.
Q&A: What’s the best way to invest for our baby?
Crowd-to-let: How crowdfunding sites can give investors a slice of the property market for £500
Simon Read: 'Seven Families campaign offers an escape from financial and emotional distress'
After the election: What will Britain's financial future look like on 8 May?
General Election 2015: How you vote next week could affect your finances
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...
Day In a Page
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park