Harland has reimbursed its small pension fund for a pounds 500,000 investment it made in Perfect last year. This is part of a pounds 5.1m write- off which also covers future losses and money which Perfect owes Harland for supplying computer equipment. Perfect provides an on-line news cutting service.
Another pounds 3.5m provision covers bad debts, reorganisation costs, legal fees and the early termination of the contracts of the former chairman, Roy Ashman, 'and related staff'.
The group said that 'despite strenuous efforts' it was unable to provide formal evidence of the beneficial ownership of a major stake in Perfect held by Sandford Etablissement, a Liechtenstein trust. Harland said it did not believe any member of the group had either a beneficial interest in or control over the shares.
Harland has paid Oerlikon- Buhrle, a Swiss company, SFr500,000 ( pounds 193,000) to unwind the highly complex deal through which Sandford acquired its stake last year. This leaves Harland free to sell Contraves, the electronic drives business which the group bought from Oerlikon-Buhrle.
Harland has bought 63 per cent of Perfect but it has not been able to reach agreement to buy Mr Ashman's 27 per cent stake.
The adoption of a more prudent accounting policy for research and development costs cut pounds 2m from profits, leaving the pre- exceptionals total at pounds 2.3m, against last year's total of pounds 10.4m.
Harland is left with net assets of only pounds 8.1m compared with the pounds 20.9m it reported last year, although this has been restated at pounds 18.9m. The impending sale of Vickerys, a specialist manufacturer for the paper industry, will restore net assets to pounds 12.9m.
Harland's shares slid a further 28p to 40p yesterday. The shares have lost 94 per cent of this year's peak value.
Harland yesterday denied the accuracy of Companies House documents that show John Redshaw, Harland's managing director, to be a shareholder in his father-in-law's firm, which is carrying out building work at the group's Milton Keynes offices. Harland said Mr Redshaw had never been a shareholder in Industrial Radiographic Services and his wife had never been a director.
Peter Thayre, Mr Redshaw's father-in-law, could not explain why the Companies House records were incorrect. He said he had only named himself and his wife as directors when filling in the forms.
Sharron Redshaw is named as a director and secretary of IRS. Her name appears in handwriting similar to that used for the names of Mr Thayre and his wife. The annual return is signed by Mr Thayre.Reuse content