Young & Co, the London brewer and pub operator, yesterday came in for heavy criticism from corporate agitator Guinness Peat Group at its shareholder meeting.
GPG accused the brewer of serving up a poor return on capital and having lax corporate governance. Blake Nixon, GPG's UK executive director, grabbed the opportunity to attack the brewer, in what was the first time in five years that the rebel shareholder had not lodged a resolution calling for specific action.
In front of a packed meeting in Wandsworth's town hall, Mr Nixon questioned why when Young's targeted a 12.5 to 15 per cent return on capital, it only delivered 6 per cent. "It's like lowering a hanging man two inches closer to the ground. It seems better but it's unsatisfactory," he said of the company's five-year performance. GPG, which has used previous AGMs to argue against Young's two-tier share structure, which keeps voting rights under family control, called for more independence for the Ram Brewery Trust.
Mr Nixon said there was a "conflict of interest" over the fact that the pension trust is run by three members of the Young family yet controls 26 per cent of the voting shares.
Mr Nixon said that since GPG, which owns 25 per cent of Young's A shares but has voting rights over just 10 per cent, had begun targeting the brewer five years ago, Young's had adopted "two-thirds" of the rebel investor's recommendations. The most significant was Young's decision last November to embark on a share buyback programme, advocated by GPG for the past five years. The company said it chose to buy back the non-voting A shares on "economic" grounds.
John Young, the brewer's 82-year-old chairman, used the meeting to hit out at the Government's "love affair" with red tape. A recent study found that the pub industry had been subjected to 153 different items of bureaucracy since Labour came to power in 1997, he said. "Labour's red rose emblem should be replaced by a bundle of red tape," he added.
It was the first time in five years that Mr Young had not donned protective gear to help him fight off a GPG onslaught. Previous meetings have seen him wear giant boxing gloves, a beekeeper's outfit or brandish a Victorian megaphone.
The company said trading in the first quarter had been in line, helped by the sunny weather in June.
- More about:
- Will Young