BZW resigns over ASH dividend scheme

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BARCLAYS de Zoete Wedd yesterday resigned as joint stockbroker to Automated Security Holdings, the security group, because it refused to alter the terms of its enhanced dividend scheme despite a profits warning that sent its shares tumbling 30p to 102p.

ASH warned investors that it would have to make a pounds 3m provision in its accounts for the year to November, which meant that profits would be 'significantly below market expectations'. Analysts had been forecasting between pounds 17m and pounds 18m for the year, but that has now been cut to about pounds 13.5m.

The warning comes less than three months after ASH encouraged shareholders to take their interim dividend in shares by offering them 50 per cent more than the cash payment. The reference price for the shares was set at 142p by BZW on Tuesday, when it also sold 892,000 shares at 136p on behalf of shareholders who wanted to convert the scrip dividend into cash.

A spokesman for BZW said: 'We were sponsoring the enhanced scrip dividend and, in the light of today's announcement, the reference price is wrong. We recommended ASH withdraw the scrip, but our advice was not taken.'

Tom Buffett, the chairman of Automated Security Holdings, would not comment on the decision.

The profits warning was further confused by a mistake in the initial version, which said that the provision for losses on discontinued businesses would be pounds 32m, instead of pounds 2m.

The mistake was corrected within 30 minutes, but the shares had fallen to 95p and 250,000 shares were traded.

A spokesman for the Stock Exchange said that these deals would be unwound only if evidence of fraud was found.