Paul Mumford is a senior investment manager at Cavendish Asset Management and owns stock in Lighthouse as part of his AIM Fund. His comments come after the company announced its desire this morning to consult shareholders over joining every other IFA group and delisting from AIM.
Mumford is urging shareholders to vote against the move.
“The Lighthouse Group management clearly thinks that there might not be much of a future for the company once the RDR reforms come into effect. Whether this fear is justified or not, the manner in which they are going about de-listing for AIM is shoddy to say the least, and will disproportionately hurt the majority of shareholders in order to benefit the few.
“The company is in a decent situation at current, with a market cap of £6m and £11m in cash. The directors only hold 7% of the business and may be looking to get a quick sale following the de-listing; yet since the announcement the overall share price has plummeted from 5.75p to 3p.
“The least the management could do for the other 93% is table a cash offering at the value at the time of the announcement.
“Should no offer be forthcoming I would urge fellow shareholders to vote against the de-listing, as given the way in which it is being done it can only hurt their interests.”
David Hickey, chairman of the Lighthouse Group – the UK’s largest autonomous IFA and Wealth Management group – commented: "For some time the conventional advantages of being listed on AIM have not applied to the company and consequently the Board believes that it will be more advantageous for Lighthouse to operate as an unquoted entity.
As reasons behind its thinking, the company the collapse of several substantial international entities after 2008, the increase of regulation of which RDR is a part as well as the improvement of consumer rights resulting in “a far more uncertain trading environment than has ever previously existed”.
It concluded: “Accordingly, the Board believes that it is difficult to see how the investment community will redevelop a desire to acquire and hold IFA related shares in the foreseeable future.”
The vote will be held at a General Meeting will be held on 31 July with 7 August the company’s proposed last day for dealing in its shares.
