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LONDON - Science Group plc, the second largest shareholder in engineering firm Ricardo plc, has called for a general meeting to vote on the removal of Ricardo’s Chairman, Mr. Mark Clare. This move follows a series of financial downgrades and strategic missteps that have led to a significant decline in Ricardo’s shareholder value.
Science Group, which holds a 20.08% stake in Ricardo, has expressed dissatisfaction with the current leadership’s execution of the company’s 2022 strategic plan. According to Science Group, Ricardo’s financial position has deteriorated since the plan’s inception, with key metrics such as underlying operating profit and net debt worsening considerably. The latest house broker forecast suggests a stark variance from the FY21/22 figures, with underlying operating profit expected to drop by 26% and net debt forecasted to increase significantly by June 2026.
The call for a leadership change comes after Ricardo’s Business & Strategy Update, which Science Group criticized for lacking substance and failing to address shareholders’ concerns. The update was seen as a mere reiteration of existing strategies rather than a robust plan to recover shareholder value.
Science Group has proposed a turnaround strategy for Ricardo, suggesting the company be restructured into three independent operating divisions and undergo a cost realignment to improve productivity. They believe that addressing these operational issues should start at the top of the organization, beginning with the leadership of the Ricardo Board.
Additionally, Science Group has acknowledged unsolicited inquiries from private equity firms regarding Ricardo. While open to considering any proposals that benefit all shareholders, Science Group has reservations about the feasibility of an immediate sale process or a break-up model, given the current economic climate and Ricardo’s recent performance.
Science Group’s requisition for a general meeting is positioned as a vote of no confidence in the current leadership of the Ricardo Board. The outcome of this meeting could lead to a significant reconstitution of the board, with implications for the company’s future direction.
This development is based on a press release statement from Science Group plc.
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