Peek sacks its chairman in strategy row

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The Independent Online
Peek, the traffic management group, yesterday sacked its chairman, Ken Maud, citing irreconcilable differences over future strategy for coping with the financial problems that led to a shock profit warning six weeks ago. He has been replaced by David Walsh one of the non-executive directors.

The company's share price which has been in free-fall since hitting a record 130p last summer, yesterday gained 4.5p to 39.5p on the boardroom shake-up.

Allen Standley, chief executive, said differences had been developing over a long period. They came to a head at a meeting on Thursday when the rest of the seven-man board rejected Mr Maud's "high-risk strategy" for solving the group's problems. His contract has been terminated, and Mr Maud has returned to his home in the US.

Mr Maud was on a two-year rolling contract and annual remuneration of pounds 202,000. His severance package has not yet been decided, but he will be compensated, Mr Standley said. Mr Maud also owns 3.2 million Peek shares through a family trust.

His solutions for resolving Peek's problems involved further expansion of the traffic control business into new geographic areas and acquisitions.

The board prefers to try and work their way through the financial difficulties on a "low-profile" basis.

Three-quarters of the business consists of computerised roadside data collection and traffic management systems for motorways and one-way systems.

The group had reported a 9 per cent rise in turnover and a 56 per cent rise in profit to pounds 16m in 1995 , but the half-time results for 1996 combined a further 11 per cent rise in turnover with a 55 per cent plunge in profits to just pounds 3.44m. The full-year figures in March showed a 13 per cent rise in turnover and a 21 per cent drop in profits to pounds 12.6m.

That fall was followed six weeks later by a warning of a likely loss of pounds 1.5m in the first half of the current year.

Peek blamed a slowdown in orders as a result of the deferment of government funding for clients in several Asian countries, and loss-making contracts in the Netherlands, UK and North America.

Losses include a pounds 1m provision to cover higher than expected costs on two Dutch contracts, and pounds 1.9m spent on product development and the integration of two acquisitions.

The warning also foreshadowed increased competition from Siemens in the Dutch market.

Cost over-runs will continue until the end of the year and second half profits are unlikely to exceed the pounds 9.2m recorded in the second half of last year.

Brokers immediately slashed their forecasts for this year from pounds 13m to pounds 7m-pounds 8m.