Number 43—August 2014 ShareSoc Informer Click on any index item below I am not sure to go directly to the article in Editorial that it will ever a digital edition. totally replace Our cover page photograph in this supermarket In this Edition edition is of that iconic City building, shopping in the Gherkin. It’s now up for sale. To terms of Oxford Tech VCTs you about £650 million apparently. speed of There is only one defect I am told—in selection and Tesco’s new leader winter ice and snow sometimes price compari- freeze on the top, then slide down the son. They Voting at Majestic Wine sides hitting people below. surely need more tools to Active Managers and We have articles on the Oxford help the shop- Monks I.T. Technology VCT campaign and on per, and warn- Hargreaves Lansdown’s about face ing messages High pound hits profits on corporate action charges. Both such as “do successes for representations by you really Good News from ShareSoc. want to buy Hargreaves Lansdown this?” for the There is an article on Majestic Wine inexperienced. Delays in SIPP transfers where I recently did some internet shopping. As a shareholder I thought There is some feedback on the Participation in Share- it best to sample their wares, and results of the Member survey on class holder Class Actions their system seemed to work well. actions on page 7. Thanks to every- one who responded on that. TR Property IT Another article is on recent events at Tesco. But my experience of internet And note we have lots of events com- Are tips useful? shopping at another listed supermar- ing up for Members—see page 14. ket chain proved to be less than per- fect. I managed to buy one banana Roger Lawson Controlling Bankers ShareSoc Deputy Chairman instead of one bunch, and the yogurt Email: [email protected] Alkane Placing & AIM pot I bought was enormous. and other regulatory changes Quotes of the Month CCLA opposes most “It’s time to check out of Tesco as profits are likely to fall”….. John remuneration reports Ficenec in the Daily Telegraph, and “Dave Lewis knows nothing Book Review—Shredded about retailing, but maybe that doesn’t matter, because as a lead- (Goodwin & RBS) ing supplier he certainly knows how to win price wars and per- haps that is the big issue now facing Tesco in the UK”…. Nick Future ShareSoc Events Bubb also in the Daily Telegraph. See article on page 3 on Tesco. New AGM Reports “Companies creak as rising pound takes its toll”…….Headline in the Daily Telegraph. See article on page 4. See the last page for “Wine company board dodges potential pruning”…….Headline in publisher and contact the PIRC newsletter on events at Majestic Wine (see page information plus terms 3). of use. Copyright © UK Individual Shareholders Society—www.sharesoc.org Page 1 ShareSoc Informer Company News ShareSoc formed a "Shareholder Oxford Action Group" with a committee Technology of interested shareholders to make representations on this VCT matter and protect their interests. Events at this company may not We also pushed for changes to have affected many ShareSoc the corporate governance of Members, but it’s worth leading these VCTs including changes in with this story as an example of the directors. how effective a Shareholder On the 12th August the boards Action Group can be in terms of of these companies announced obtaining some changes. major changes, with two new The Oxford Technology VCT directors (Alex Starling and Rich- (OXT) and Oxford Technology 3 ard Roth) on OXT and one new VCT (OTT) previously had their director (Robin Goodfellow) on VCT status withdrawn by HMRC, OTT. although this has now been Alex Starling will become the temporarily "set aside". The latest Chairman of OXT and Robin ShareSoc Deputy Chairman news at the time of writing is Goodfellow will become the Roger Lawson had this to say on that the VCTs have received a Chairman of OTT. the above changes: "I welcome response from HMRC to their these changes and the appoint- appeals. HMRC indicate changes Lucius Cary, the fund manager, ment of Robin Goodfellow, who are required if VCT status is to will resign as a director at the was one of the Shareholder be retained and they have speci- forthcoming AGM but we under- Action Group committee fied 40 days for a response from stand is remaining as fund man- members, is particularly the company. The latter are ager and will advise the boards appreciated. considering whether they can when necessary. comply. I think these changes provide a Note that ShareSoc has issued I do not consider it advisable that sounder footing for these compa- some new and revised voting he should remain on the boards nies in the future, although their recommendations for the forth- of any of these companies. small size is still a concern and coming AGMs of these compa- we encourage the boards of nies on the 27th August which Apart from the corporate govern- these companies to consider a are available from the ShareSoc ance issue of having the fund merger. I hope that these chang- web page dedicated to this cam- manager on the board, as I said es will also help with the appeal paign. in a previous note on this subject: to HMRC as it should demon- "clearly [these VCTs] have been strate that the boards of these Editor’s Note: The above article, run in a similar way and it is only companies will continue to which is based on past news and fortuitous that they have not strengthen their internal process- press releases, understates the faced the same difficulties. All es to avoid the kinds of mistake amount of effort that has gone in these VCTs have demonstrated that led to the loss of VCT status. behind the scenes to persuade poor performance over the many This campaign has achieved a the directors of these companies years they have been in exist- clear success for shareholders (including Lucius Cary) that some ence”. It is a common failing of whatever the outcome of the changes were necessary. VCTs that they are dominated appeal to HMRC and I thank Tim by the fund managers and often But it is noted that Mr Cary says Grattan for leading this campaign appear to be run more in their he intends to remain a director of to date". interests than that of investors. VCT 2 and VCT 4. Copyright © UK Individual Sharehol ders Society—www.sharesoc.org Page 2 ShareSoc Informer Company News (Cont.) The new CEO is to be Dave He also received some no doubt Lewis who joins from Unilever heartfelt plaudits such as "done a where he has worked for 28 huge amount...", "achieved a years, mainly in personal care great deal", "the board are deeply products markets. So the new grateful" and "an outstanding CEO does not have a strong achievement" to quote from the retail background? Yes that's RNS announcement. But appar- right - he does not! ently not quite enough to justify his retention. Shareholders in Tesco admits it Flogging personal care products Tesco might not agree with the to supermarket buyers is surely a praise as the share price of needs a new very different background to con- Tesco has moved from 400p to vincing retail consumers to buy 282p during Mr Clarke's reign. leader food (and a few other products) But it perked up 2% on the day in your shops, however strong the news was released. On the 21st July Tesco announ- his general management skills ced that CEO Philip Clarke is might be. However the positive impact on departing. The statement includ- the share price soon evaporated ed a further profit warning which Mr Clarke is getting 12 months after the media commented on a mentioned that the overall market pay in lieu of notice, but appar- possible move by the new CEO is weaker and trading profit in the ently payable from when he ends to "take a bath" over all the things first half of the year is below a transitional period in six months he might identify as needing expectations. It's surely an time from the 1st October - so change, and a possible rebasing acceptance that Mr Clarke had effectively he is getting 20 of the dividend. Clarke was criti- been given long enough to turn months notice. Plus he will cised for holding onto the US around the business, but had remain Chairman of the Tesco operation too long, and not start- ultimately failed (he has been in joint venture in China (pay for ing a more aggressive price war the CEO role since March 2011). that is not disclosed). to challenge the discounters. The company subsequently with- Everyone reading this is encour- Voting without drew those resolutions because aged to make sure you vote and knowing what being an AIM company they don't find out what you are voting for legally need them, and it was a and why! for at Majestic mistake to include them. But the amusing thing is that at the AGM A full report of the Majestic AGM Wine the Chairman said that both reso- is on the ShareSoc Members lutions got large majorities in Network, including a review of Last month Shareholders at favour on the proxies returned. the wines below available from Majestic Wine were given a Majestic as a result of sampling proxy voting form that included It is clear that a lot of sharehold- their wares.