Thomas flotation steams ahead

The two creators of the Thomas the Tank Engine television series, who bought the rights to the character from the Rev W Awdry for pounds 50,000 in 1981, are to float the company on the stock market next month for pounds 30m.

Britt Allcroft and Angus Wright, the husband and wife team who founded the Britt Allcroft group, will own a 28 per cent stake in the quoted company valued at pounds 8.4m.

Other significant shareholders are Ringo Starr, who narrates the Thomas programmes and holds a 5.1 per cent stake, and Lord Romsey, the nephew of Lord Mountbatten and another of the original founders, who owns a 7.5 per cent holding.

Mr Wright, deputy chairman and chief executive of Britt Allcroft, said it was unfair to compare the pounds 50,000 they paid the Rev Awdry, the creator of the Thomas books, with the money the flotation would raise.

Rev Awdry, though 86 and bed-ridden, was, he said "overjoyed by the way the Thomas character and his books have been developed". Rev Awdry's publishers, William Heinemann, earn royalties of about pounds 2.8m a year from the use of the Thomas name on everything from home videos to mugs, birthday cakes and children's kites, and a proportion of this goes to the author. WH Books retains the right to the Thomas books.

Ms Allcroft will be paid pounds 175,000 and Mr Wright pounds 135,000 and, along with two other executive directors, finance director William Harris and marketing director Susan Sangway, will be eligible for performance bonuses worth up to 50 per cent of salary.

The flotation will involve 35 per cent of the company being placed with investors and pounds 5m of new capital being raised to fund expansion of the business. Future plans include a Hollywood movie in partnership with Paramount and development of another character, an elephant called Mumfie.

The two principal institutional investors, Mercury Asset Management with 31.5 per cent and Guinness Mahon with 9 per cent, are each selling about a third of their holdings and have agreed not to dispose of further shares for a year after the flotation.

Britt Allcroft made pre-tax profits of pounds 1.95m in the year to 30 June on turnover of pounds 11.5m. Its main markets are the UK, US and Japan and Thomas accounts for about 90 per cent of sales. Although the company plans to expand its other brands, including a US television programme called Shining Time Station, the mainstay of the business will always be Thomas which, for instance, has just been launched in Germany.

Comment, page 23

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