Payouts scuppered at Coutts Group

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The Independent Online
COUTTS Consulting Group, formerly DC Gardner, saw the last stage of its two-year reconstruction unexpectedly scuppered yesterday by its former chief executive, Barry Topple, who was replaced last November after less than a year in his post.

He led a group of preference shareholders who blocked a proposal that would have enabled Coutts to pay off pounds 480,000 owed in dividends to preference shareholders and resume dividend payments on ordinary shares.

Coutts said it understood that a number of preference shareholders including Mr Topple - who still controls 70 per cent of the preference shares - wanted improved conversion terms for their shares.

'We were a bit surprised because we had reason to believe, until Friday afternoon, that there was not a problem,' Stephen Johnson, the new chief executive, said. 'This has proved not to be the case.'

Under the proposal the outplacement and conference centre company would have reduced its pounds 8.35m share premium account by pounds 6.6m and boosted the profit and loss reserves.

Mr Johnson said ordinary shareholders would have to decide upon any improvement in conversion terms. Sir Kit McMahon, the non- executive chairman, would be writing to them today for their opinions.

Either they could approve a dilution in their stakes, he said, or accept that a resumption in dividend payments would be further away than the 12 months that Coutts hoped for should the proposal go through.

Mr Johnson said two of the other three preference shareholders sided with Mr Topple at an extraordinary meeting adjourned yesterday. One agreed to the proposal but Coutts needed the approval of 75 per cent of the issued convertible preference shares.

Mr Topple was replaced after less than a year in his post after the company issued a profits warning. A writ against Coutts claims pounds 294,320 in damages and compensation for the loss of residency at Eynsham Hall, one of the company's training centres.

Last month the company sold its training division to Euromoney Publications for pounds 3.7m. The proceeds will offset the pounds 5m cost of giving up a 25- year lease in London Docklands.

As DC Gardner it announced pre- tax profits for 1992 of pounds 1.22m against a restated loss of pounds 10.1m for the previous year. The loss, originally reported as pounds 3.76m, was recalculated under the new FRS3 reporting standard.

Coutts' shares closed up 5p at 51p.