Computer services group crashes

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The Independent Online
Shareholders in Wakebourne, the west London computer services group, stand to see the value of their investment wiped out completely after the company announced yesterday that it had gone into administrative receivership with debts of almost pounds 10m.

Last night receivers from accountants Ernst & Young said they could announce a sale of the company's main trading business, Wakebourne Group, as early as today. Jason Elles, joint administrative-receiver, explained: "I would hope in the next day or so there'll be an announcement. It could be the whole business or several separate sales. After all, we've been working over the weekend on this."

Mr Elles was referring to the final confusion in Wakebourne's 13-year history. Ernst & Young were called in by the Bank of Scotland late into last Thursday night, with the intention that the company would inform the stock exchange on Friday.

However, Wakebourne's brokers, Hoare Govett, were apparently unable to complete the procedure in time and had to wait until yesterday to make formal the statement.

The shares had been suspended since 12 May after the company announced it was in "advanced discussions" which may lead to an offer at a price "substantially below" the current level of 10.5p, valuing the group at just pounds 2.4m.

Mr Elles said ordinary creditors were also unlikely to emerge with any cash from the sell-off, after the Bank of Scotland and other backers received their share. He added: "The problem the group had was a burden of debt they could never get rid of. They tried to trade out of it but failed to increase their customer base sufficiently."

Yesterday Wakebourne's 300 staff, many based at its headquarters at Hanworth near Heathrow Airport, were told to carry on as normal pending the sale of the company. The company had a variety of activities, including maintaining computer systems and installing cables for clients, which include several large City of London financial groups.

Shareholders had become increasingly frustrated, despite a brief revival in the share price in 1994 on hopes of that a dividend. Trading deteriorated last year, with losses of pounds 3.38m after exceptional costs of of pounds 2.37m.

Leslie Warman, the part-time chairman, insisted remedial action was being taken, yet the last set of first-half profits at just pounds 212,000, prompted further downgrades. The shares fell from a 12-month high of 35p.

Neither Mr Warman nor Frank Emerson, the chief executive, could be contacted yesterday.