FIFE Indmar has responded to shareholder concerns by abandoning its micro-conglomerate strategy to focus on one of its two divisions.
The Edinburgh-based industrial distribution and engineering group is to concentrate on its industrial distribution and security services businesses, and will dispose of the engineering and oil industry supply businesses which made less than half of last year's #1.9m pre-tax profit but which have improved their performances since.
Fife Indmar reported a profit recovery in March, sparking a 10p rise in the share price to 52p.
Yesterday's announcement drove the price 11p higher to 70.5p, taking the group's market value in a few weeks from #8m to #11m.
The miserly rating of the group's shares, still only on eight times earnings, had already prompted comment from chairman John Pattisson, a former Hanson executive who came on to the board a year ago and took over the chairman's role from chief executive Gavin Hepburn last October.
Pattisson told the company's annual meeting yesterday: ''It is clear to the board that in current market conditions the profitable development of all our present activities cannot be achieved through the framework of a relatively small plc.''
The industrial distribution offered ''excellent opportunities for expansion both organically and by acquisition''.
The board was now pursuing the ''more focussed strategy'' by looking for an orderly sale of the non-core activities in oil-related distribution and
engineering.
Pattisson said afterwards: ''These are good companies, and therefore their prospects I believe may actually be enhanced in some cases if we can find different
ownership.''
The successful changes made under managing director Jim Smith meant the businesses were now a more attractive
proposition.
On whether a management buy-out was in the frame, Pattisson said there had been expressions of interest in the past and any proposals would be looked at sympathetically.
Industrial distribution managing director Ramsay Malcolm, 50, joins the board. On whether any other changes were planned, and on the future of chief executive Hepburn,
Pattisson said: ''Gavin Hepburn did an excellent job in achieving the recovery in profits last year.
''When you have got businesses doing well you don't rush round making arbitrary changes, it is one step at a time. Gavin is totally on side.''
On whether the group's major shareholders had been pressing for a change of strategy, Pattisson said: ''They are in support of what we are trying to do.
''They recognise the difficulties and I have always been aware of their views.''
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