Amazingly the SPL, SFA, SFL and Woody Allen & Spice Girls were all connected with a now liquidated company that Charlie helped float on the Alternative Investment Market (AIM) back in 2000 and I can’t help but wonder if the SPL and SFA remember much happier times as valued customers with their name and reputation, along with Woody and the Girls, helping boost business and share prices.
Kingsbridge Holdings Plc is an interesting study in a company brought to market with a successful flotation and dazzling share performance sizzling upwards from 25p to 94p in months. But the company value collapsed from £60 million to £2 million in little over a year as shares slumped to 2.5p.
Things became so bad that in March 2003 ‘substantial shareholders’ were forced into a desperate bid for a board seat to protect their interests. This was rejected but within months the board capitulated and the shareholders’ choice was appointed Chief Executive as the storm clouds surrounding the troubled company thickened and darkened.
A number of factors contributed to the failure of the company which eventually became a cash-shell, changed its name and was finally liquidated and dissolved. This post doesn’t cast blame or responsibility on any director for the outcome. Dealing in shares can provide salutary lessons and it is always worth remembering that what goes up can also come down so don’t gamble on shares unless you can afford to lose the cash 🙂
Kingsbridge Partnership was founded in 1992 by Kevin McMenamin and David McKee and provided specialist financial advice and services to high net worth clients, including players, managers, coaching staff and administrative personnel from English professional football clubs.
The two partners were joined by Charles Green who became chairman of Kingsbridge Holdings Plc which floated in July 2000 at 25p per share to raise £14 million funding for an aggressive expansion programme which saw them open offices, within a couple of years, in Nottingham, Glasgow, Harrogate, London and Sunderland with new client groups in non-football sports and the entertainment industry.
In September 2000 £3.99 million was spent buying John Murray & Company (Scotland) Ltd – a leading football focused independent financial adviser whose clients included, at that time: Scotland Manager Craig Brown; Christian Dailly, Blackburn Rovers & Scotland; and Jack McGinn, President of the SFA; as well as the SFL and SPL.
Chairman Charlie stated: ‘The acquisition of John Murray, a leading adviser in Scotland, is an important step in the development of the Group. The deal is expected to be earnings enhancing and will strengthen Kingsbridge’s position not only in Scotland but also throughout the UK.’
The share price soared to 85p in mid September and was tipped to trade up to 100p.
In October 2000 Maxdelta Ltd, a subsidiary of Keysports Management Ltd with clients in the media, entertainment and sports industries, such as ‘the Spice Girls, Beautiful South and Woody Allen’ was acquired and Charlie said: ‘At the time of listing we indicated our ambition to diversify into other high net worth areas beyond premier league football where we sit as a market leader’. He promised even more buy-outs and a widening of the Kingsbridge client base.
The following month Kingweb was acquired – the website of the professional managers in the FA Premier League and Nationwide Football League – which Charlie described as: ‘One of the most important in football’. Agreements were reached with other companies bringing clients from: Rugby League, Rugby Union, horse-racing, rugby, golf and cricket.
In April 2001 the dizzy round of acquisitions continued with the £12 million purchase of the Stafford Group Plc and in July, Kingsbridge’s main competitor Benson McGarvey Limited was snapped-up for £13.5 million with Green stating: ‘The acquisition will help Kingsbridge to achieve its stated aim of becoming the leading provider of financial services and advice to sports personalities’.
By November 2001 Charlie was able to report: ‘A very active and successful period of some fourteen months since the flotation of the Company on the Alternative Investment Market. The Board believe that the future for the enlarged Group is exciting and we are optimistic that the current year will be a year of continuing progress and expansion.’
In May 2002, Green reported: ‘Your Board is optimistic that the second half of the current year will show continuing progress and expansion’ but Kevin McMenamin and John Murray stood down from the board at the same time and by July, Charlie was predicting Group results for the year ended 31 August 2002: ‘Will be significantly below current market expectations’.
Come September 2002 the Board announced a review of its non-sports division because of continuing uncertainty in equity markets and low activity generated by the Group’s non-sports client base although it noted the sports division continued to ‘trade satisfactorily’.
The end of January 2003 saw the publication of the prelim results for the year to 31/08/2002 which revealed a loss before tax of £25.69 million as opposed to an £0.82 million profit the previous year. Green stated: ‘Set against a year of weak investor confidence and poor stock market performance and when judged against others in our quoted peer group, the results achieved are quite satisfactory.
‘As a consequence of my other business commitments, particularly my role as Chief Executive of Medical Solutions Plc, I have decided, with immediate effect, to step down as Chairman and will continue as a non-executive director’.
At the end of February 2003 Kingsbridge reported: ‘The Group continues to experience extremely difficult trading conditions. In the absence of any improvement in the general economic climate, results for the financial year to 31 August 2003 will be substantially worse than current market expectations’.
What wasn’t known publicly at the time was that a number of substantial shareholders ’were extremely concerned that the company’s value had plummeted from more than £60m to less than £2m in little over a year’.
Laurence Turnbull was sent as an emissary from the concerned shareholders to meet with the Board on 12 March 2003 but was refused a place on it to represent shareholder interests. The Board rejected Mr Turnbull as it: ‘wished to continue with their plans for the company’.
However, days before the end of the company’s financial year, they contacted Mr Turnbull to offer him a non-executive directorship and on 27 August 2003 he was appointed Chief Executive.
Turnbull, then chairman and chief executive of the privately owned conglomerate Texas Holdings Limited, brought in a Company Secretary and non-executive director, both personally known to him, and later stated: ‘Within days I became aware of the grave difficulties facing the Company’. This included a steadily increasing overdraft and substantial payments due to major creditors including HMRC. In order to gain support from the company’s bank Turnbull personally provided ‘comfort’ to them.
The new chief executive added: ‘Within days, two of the cornerstones that made up the company had been sold, in effect to the management, and the company had no financial facilities to see it through the disposal of the remaining two businesses.
‘To compound matters, one of the businesses, had virtually been sold, in a separate management buyout. This then left a small operation in Scotland to be dealt with and a heads of terms for its disposal were in existence.
‘It is not appropriate for me to comment on the previous board of directors however I am pleased to inform you that from the date of my appointment no fees or salaries have been paid to a Director of the Company.’ (Emphasis added)
Company Chair Eric Cater added: ‘The market difficulties and the collapse in the share price meant that our key people were disillusioned with the public status of the Company’.
On the day Turnbull was appointed chief executive, Charles Green resigned as a non-executive director to concentrate all his efforts on his role as chief executive of Medical Solutions Plc and was replaced by Brian Willmott who had been brought in by the new chief executive.
Posted by Ecojon
To see how Charlie fared with Medical Solutions Plc please read the next instalment here!