Tuesday 16 March 1999
For many years, Mr Hutchings, a Lord Hanson protege, did terribly well for his shareholders. Following in the maestro's footsteps, he built a many-faceted conglomerate out of businesses in mature, cash-generative industries. Even after conglomerates turned unfashionable, he stuck to his guns, insisting that, fundamentally, all businesses were the same - the only thing that separates one from another, in his view, is good and bad management.
The turning point for his share price was the acquisition of Ranks Hovis McDougall. The age of the conglomerate was not quite over, but even then hardly anyone, apart from Mr Hutchings, believed it made any sense to combine food manufacturing with automotive and construction components, Smith & Wesson guns, bicycles and lawnmowers. As it happens, the "buns to guns" combine, as Tomkins rudely became known in the press, has been as good as its word, and in a difficult market, it has managed to increase margins and profits at Ranks quite markedly.
Not that this has done Mr Hutchings any good. It is not just conglomerates that are unfashionable; Tomkins is also in some deeply unfashionable businesses too, cash-generative though they might be. Mr Hutchings has struggled to find a way forward, but the big acquisition he needed to fuel earnings and growth has failed to come his way.
Now he's being forced to fall back on a course of action he always vowed to resist - share buy-ins. Even for him, it's a no-brainer with the share price as low as this; few acquisitions could ever promise to be as earnings- enhancing.
Since the last figures, Tomkins has bought back more than 5 per cent of its shares; a tender offer for a further 15 per cent is now planned. However, the offer has been pitched at such a miserable level that unless the share price continues to shrink, few shareholders are going to want to avail themselves of it.
Mr Hutchings has had a good innings. It may be unfair and unjust to say it, but Tomkins is a company that looks to have had its time. A more radical break-up than the one proposed is called for. Everything else has been tried; separating the company for disposal or merger into its three core constituent parts looks to be about the only option left that might be worth pursuing.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 MH370: 'Putin ordered plane to be flown to Kazakhstan space port,' conspiracy theory claims
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin, says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...