New Victoria chairman’s pledge after board victory

Investors in Victoria, which spins yarn at its factory in Holmfirth, West Yorkshire, yesterday voted chairman Katherine Innes Ker and another non-executive director, David Garman, off its board.

Former directors Geoff Wilding and Alexander Anton, a descendant of the company’s founder, were voted back to the board, along with new non-executive Andrew Harrison.

The meeting yesterday in Birmingham followed an acrimonious power struggle between the proposed board and the company’s directors and managers.

The director removal and appointment resolutions won the support of roughly two thirds of the votes cast – between 3.5m and 3.8m shares.

The total number of shares voting for the resolutions ranged from 51 to 55 per cent of Victoria’s issued share capital, from a total of 6.9m shares.

Mr Wilding, who becomes executive chairman, said the result was “expected” and gives the new board a “pretty convincing” mandate. The new directors were backed by 18.4 per cent shareholder, New Fortress Finance Holdings.

“We won more votes (than at the AGM) despite the carry-on in the last few weeks,” he said. “The shareholders have made it very clear that they do not want the company to continue as it has done for the last few years. Shareholders want a change, so clearly things cannot continue as they are.”

He plans an immediate strategic review, and said “pretty much everything” will be under scrutiny. Job cuts will “depend on market conditions”, he added. Asked if he sees a future in UK carpet manufacturing, Mr Wilding said: “Ask me that question in three to four weeks.”

Mr Wilding, a former investment banker, said the company will look to appoint a finance director as a “high priority”, adding he does not know who is currently doing the finance role at the £77m turnover company.

On the chief executive role, he said: “We will have to wait and see.”

He said plans to sit down with the company’s managing director, Alan Bullock, today. Asked if Mr Bullock, a vocal opponent of the new directors, will remain with the group, he declined to comment.

The new directors have been accused of planning to break the company up and install a lucrative incentive scheme. Mr Anton and Mr Wilding resigned in August when an incentive scheme, which would have paid them half of any capital return after shareholders had received £3 per share, was rejected by the board.

Mr Wilding said last night: “We are going to sit down with the advisers in the next few days and look to devise an incentive plan, but that’s currently a blank sheet of paper.”

In a statement after the meeting, Ms Ker, Victoria’s outgoing chairman, said: “Today’s general meeting took place to uphold the principles of good corporate governance and shareholder democracy. Our campaign has ensured that the new directors of Victoria will be fully accountable for their actions and stewardship of the business to all shareholders.”

The company this week warned tough markets will drive half-year sales lower than a year ago. It expects to break even in the six months to the end of September, before exceptional costs and after investment.

The manufacturer insisted group trading has been “satisfactory, particularly in the light of the prevailing difficult market and economic conditions” in its markets of the UK, Ireland and Australia. Victoria said trading in the UK and Ireland remained “extremely tough during the first half, with both weak consumer sentiment and the impact of the Jubilee and Olympics reducing footfall on the high street”.

However, UK sales are “significantly” ahead of a year earlier, it said, as it gains market share. Victoria said it continues to grow sales with department store chain John Lewis, the insurance sector and contract and export markets. But sales in Australia continue to deteriorate, it added.

Spinning a successful yarn

Victoria Plc’s yarn-spinning mill in Holmfirth, West Yorkshire employs 124 staff, supplying yarn to the group’s carpet-making business and other carpet firms.

Victoria has invested heavily in the Westwood Yarns site in recent years.

The site spins wool and synthetic materials, also blending and dyeing it, and is based in Yorkshire’s textile manufacturing heartland.

It was bought by the group in 1989.

The group invested £1m in the site in 2006 along with £500,000 in 2007, allowing it to enter the two-ply market.

The site was restructured in 2009 and now has production capacity of over 70 tonnes per week of single-ply and two-ply yarn.

It recently introduced state-of-the-art thermal yarn splicing technology.

Victoria also has plants in Kidderminster and Australia.

The group was founded in 1895 in Victoria Street, Kirkcaldy, Scotland, and floated on the London Stock Exchange in 1963.