Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Widney Cabs – dancing with the administrators!

I see there was a ‘classic’ announcement from Widney yesterday with the board of the Widney Cabs subsidiary having appointed an administrator.

The announcement explained that as a result of a ‘serious and recent’ deterioration in trading at Widney Cabs (the biggest part of the group), the board of Widney determined that its continuing support of Widney Cabs was no longer in the best interest of the Group and accordingly, is withdrawing such support.

It went on to say that the remainder of the Group continues to be profitable and that withdrawing support for Widney Cabs will ultimately leave the remainder of the Group debt free, with a turnover of approximately £35 million.

A small foot note stated that Brian Stringer the Group Chief Executive had resigned to ‘pursue other interests’ and that Joe Grimmond will be stepping up to become Executive Chairman-quick and painless!

A look back at the recent news makes interesting reading.

In their preliminary announcement on 6th December 2006 one can pick up the following:

‘Widney Cabs suffered severe volume shortfalls but is winning significant new business’


‘Cabs has won and is winning significant new business from a broad range of customers. Many new products have been put into production during the year which will contribute to a better balanced business, with no one customer representing more than 20% of turnover.’

and finally

‘ It is ...moving into a strong position with new cabs projects going into manufacture during the year.’

In a period of just one short month the situation has appeared to have changed dramatically! Furthermore, being the Christmas period I assume they were closed down for a lot of this time.

I sense there could be some interesting financial engineering in progress. Messrs Grimmond and Errington of Widney appear to be experts in the fine art getting the best out of administrators!

All in all, what a disaster!


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