Profile: The secret of survival: Robert Montague has stood his ground amid criticism of his flashy management style. David Hellier reports

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The Independent Online
AS TIPHOOK, one of Europe's largest transport rental companies, announced boardroom changes last week, one merchant banker described the company's chairman and chief executive, who retained both jobs in the shake-up, as one of life's great survivors.

'He's so much like the archetypal Eighties businessman that one would have expected him to have been dislodged by now, like so many of the others of his ilk. So far he's like the one who got away.'

Described variously as charming, irrepressible, entertaining and a hands-on manager, Robert Montague has for some months been under pressure in the City to repair his company's battered image.

As Tiphook has shown signs of weakness on the trading front - profits of pounds 77.3m turned to losses of pounds 21.8m last year after accounting changes - its management has been heavily criticised by frustrated UK shareholders.

Common complaints are that the company's top brass are paid too much, communication with the City is poor and the non-executive directors are not strong enough.

Partly as a result of such criticisms, the company's UK shareholders have been busy selling, resulting in a falling share price and a growing US shareholder presence.

In the face of such criticism one might have expected Mr Montague to be downcast. Not a bit of it. He spent much of last week meeting regional managers. And people who have seen him recently say he exudes as much confidence as ever.

He was far too busy, the company's press spokeswoman confided, to talk about himself or his company's tarnished image to the Independent on Sunday. One suspects, though, that he is the kind of man who finds it easier to confront the press when things are going well.

He is still paid a lot. Tiphook's report and accounts, due out this week, will show that his remuneration last year was around pounds 840,000 - more or less the same as the year before.

But he is quietly doing something to deflect the criticism. Last week the company said that Rupert Hambro, the City establishment figure who has recently been appointed non-executive deputy chairman, will be heading an audit committee whose first task will be to assess directors' remuneration. More moderate pay packages are predicted for next year.

It is a start, though some doubt whether Mr Hambro, whose merchant bank has from time to time proffered advice to Tiphook, will be tough enough to challenge Mr Montague as fiercely as the City would like.

City opinion of Tiphook, and some investors' views on Mr Montague, have not been helped by a series of leaks that have preceded official announcements in the past few weeks. 'The company has been very leaky and lately, all the news leaking out has been bad news. It hasn't inspired a great deal of trust in the company,' one UK shareholder said.

If shareholders are not keen to trust the company, do they trust Mr Montague, the man who founded the group in 1978 and who has been its guiding light ever since?

The verdict is by no means conclusive. Even Mr Montague's sternest critics - those that balk at his large salary and his well-maintained suntan (he has an olive complexion that tans easily) - admit he has good qualities. 'He is a very impressive character, he is very articulate and he knows what matters in the business,' one said.

Those who know him say he is driven by a desire to be successful, to make money and to gain respect from those he admires - mainly other successful people. His recreations, listed in Who's Who, include shooting, fishing, opera and ballet, and since 1988 he has been a breeder of cattle. He was first married in 1972 and re-married in 1990. He has two sons and one daughter from the first marriage and two sons from the second.

He started his business career as a management trainee with Esso in 1964. Five years later he joined the family transport company, Cables Montague. After a few years it became clear that he had grander ambitions and he set about founding Tiphook, with the help of the family firm's finance director, Eric Goodwin, who is with him to this day.

He is said to have been an admirer of Margaret Thatcher, and Sir Charles Powell, previously her private secretary and foreign affairs adviser, joined the company's board last year. The same year the company's contribution to the Conservative Party rose from pounds 3,000 to pounds 40,000.

There was the odd mishap, such as when the company's advisers wrongly stated its assets in a prospectus for a sale of shares to the public in 1985. But Tiphook, aided by a series of acquisitions, had a fairly comfortable and extremely successful ride on the stock market until 1990, when investors started worrying about its high borrowing levels and the threat to world trade posed by the Gulf war.

In spite of the early success, though, there have been several changes of advisers as the group has grown. BZW, the original adviser, made way for NM Rothschild and it in turn made way for Lazards. When Lazards ran into a conflict of interest the company turned to Morgan Grenfell.

This year the worries in the City have become even more acute. As the problems have mounted and the company's increasingly volatile shares have fallen - halving within the past two years - Mr Montague has tried various ways to deal with what many see as a credibility problem.

The credibility gap, as far as UK investors are concerned, has two elements. Part of it reflects a 1990s scepticism of swashbuckling entrepreneurs who do not fit the old school City image.

Perhaps mindful of this distrust, Mr Montague did two things that he might have felt could give him and the company more gravitas. He moved headquarters from Kent to St James's Square, London, and then he tried going upmarket himself, moving house in 1990 from Kent to a 1,300-acre estate in Oxfordshire, previously owned by Sir Simon Hornby of WH Smith.

But the second problem is probably more fundamental. The City has in the 1990s become much more sceptical about companies with high borrowings and few assets - Tiphook's debt-to-equity ratio is nearly 500 per cent. It has been compared to other leasing companies such as GPA, whose share flotation had to be abandoned, and Atlantic Computers, which brought down John Gunn and British and Commonwealth.

Mr Montague has been more successful in finding friends in the US investment community, which is more used to companies with high borrowings and business in leasing. So for the last couple of years Mr Montague and Mr Goodwin have travelled frequently to the US to brief investors. Overseas investors, mainly American, now own more than half the company's shares.

'Americans find the high salaries less offensive,' one US fund manager said. 'The thinking here would be that you back 10 companies like Tiphook and a couple may go bust but the other eight will make you a lot of money.'

For the time being Mr Montague enjoys the support of his lenders, including Commerzbank, the German bank whose chairman, Martin Kohlhaussen, sits on the Tiphook board. And for the time being he has resisted the call to split his role as chairman and chief executive.

'He has tremendous boyish charm and that gets him a long way,' one merchant banker said.

What he needs now to go with the charm is a pick-up in trading. In September the company will begin to effect a rapprochement with the City by publishing monthly performance figures to keep investors better informed. If Mr Montague is to maintain his grip on the reins he will need an improving trend.

(Photograph omitted)

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