City pushes for change at Trafalgar

Click to follow
GROWING pressure from the City for change at the top of Trafalgar House, the construction company, has led to speculation that Sir Eric Parker is about to be replaced as chief executive, writes Clare Dobie.

Sir Eric, who turns 60 next year, has been blamed for Trafalgar's disappointing performance. It is understood that the normal retirement age at Trafalgar is 60, raising the possibility that Sir Eric may leave early.

Lord Broackes, the chairman, who formed the company in 1957, eight years before Sir Eric joined, is 58. Large investors have also called his role into doubt.

The company has come under pressure to makes changes at the top since its share price collapsed. It closed on Friday at 45.5p, compared with a July 1991 rights price of 190p. At that level it is worth pounds 4m less than the money it raised from shareholders in the rights issue designed to help to pay for Davy, the engineering group.

In August Trafalgar said it did not know why its shares had fallen. It had a record pounds 3.5bn order book, cash and unused borrowing facilities of pounds 800m and good relations with its banks.

Fund managers have become impatient with the company following disappointments with Davy, which will absorb about pounds 100m of cash this year.

Advisers to the company fear that at this value the group may be the subject of a takeover bid and have drawn up defence plans. But to date there have been few signs of corporate interest in construction and property companies.

Non-executive directors include David Howell MP, Tony Ryan, the head of GPA Group, and Alan Clements, the former finance director of ICI.