Head of Exco ousted after clash

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The Independent Online
EXCO, the money broking group recently floated on the Stock Exchange, yesterday shocked the City by announcing the resignation of its chief executive, Ron Sandler. The company said he was leaving over 'differences in management style and for not getting along with the senior management'.

The news came just three months after Exco floated. Yesterday, the shares shed 15p to 179p, ending just 4p above the flotation price.

Kleinwort Benson, Exco's brokers, downgraded their forecast for the company's pre-tax profits for the year to December 1994 from pounds 47.5m to pounds 45m. Wayne Gerry, an analyst with Kleinworts, said his downgrade 'reflected the continuation of subdued trading'.

Yesterday's announcement was the latest in a series of problems to hit recently floated companies. The news comes days after Aerostructures Hamble issued its second profits warning within four months of coming to the market.

A number of other recently floated companies have made similar warnings, prompting one analyst to say yesterday that investors in general were 'getting cautious over these floats'.

A spokesman for Exco said Mr Sandler would be resigning from Exco with effect from 31 December 1994 to be succeeded by Peter Edge. Mr Edge joined Exco 14 years ago and has had responsibility for the London moneybroking operation for six years.

The spokesman said Mr Sandler was leaving because the management style developed after the flotation could have damaged the business. 'After all, this is a people business,' he said. 'The board took a view on that and decided to bite the bullet.

'The performance of the business is not a factor in the decision. It's just styles of people. No one else is likely to go, and there is no change in strategy.'

The spokesman added that Mr Sandler was on a one-year rolling contract and would receive the 'better part' of his pounds 290,000 salary as a pay-off, but he would not be allowed to keep his 430,000 share options in the company. Of the options, 280,000 were exercisable at 72.5p, 150,000 at 100p.

According to the prospectus, Mr Sandler holds 80,094 Exco shares worth pounds 143,370 at yesterday's price.

Mr Sandler, 42, joined the company 18 months ago and spearheaded its flotation. Exco came to the market in July when the administrators of British & Commonwealth sold their remaining 40 per cent stake in Exco.

B&C bought Exco in the 1980s but then collapsed after a takeover spree, leaving the moneybroker's ownership unresolved.

The float was at a price of 175p which valued the group at pounds 215.5m.

The shares jumped to 199p on the first day of trading, but yesterday shed 15p to 179p, against the previous low of 182p. Yesterday, 240,000 shares were traded out of 123 million shares in issue.

Mr Sandler was originally a management consultant with Booz Allen and Hamilton, strategic consultants. In 1987, he joined Martin Bierbaum Group, one of Exco's biggest competititors, and last year moved to Exco.

Peter Edge,36, joined Exco in 1980 as a deposit broker. He was a director of an Exco London subsidiary, Godsell, Astley and Pearce (Eurocurrency deposits) from March 1983 and in May 1989 was appointed to the board. He was chairman of Exco's money markets product committee.

Yesterday, Exco said that although trading in the third quarter remained subdued, it had no reason to change its view expressed in the half-year results on 21 September.

(Photograph omitted) View from City Road, page 31

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