Science Group PLC on Friday stepped up its pressure on the board of Ricardo PLC, increasing its ownership above 15% and accusing board members of ‘weak operational performance’ and ‘ineffective governance’.
Science Group is a Cambridge, England-based science, engineering and technology business that provides services to the medical, defence, industrial, food & beverage and consumer sectors.
Ricardo is a Shoreham By Sea, England-based environmental and engineering consultancy.
Science group said it now has a 15.2% stake in Ricardo. This is up from the 14.2% reported by Ricardo earlier this week. Science Group has been building a stake in Ricardo since February. On Friday, Science Group said it has paid an average of 230 pence per Ricardo share.
Ricardo shares were up 3.5% to 233.89p early Friday in London. However the stock remains down 46% over the past 12 months.
Science Group shares were down 0.2% to 424.00p, though its shares are up 12% in the past year.
Ricardo has a market capitalisation of £145.6 million, while Science Group’s market cap is £189.6 million.
Science Group said it now is the second largest shareholder in Ricardo, and it may or may not increase its shareholding in Ricardo. The largest shareholder in Ricardo is Gresham House Asset Management Ltd, with a 22.5% stake.
Science Group said Ricardo shareholders ‘should hold the board to account’ for ‘weak operational performance with inadequate focus on profitability and cash flow, excessive executive remuneration and ineffective governance’.
It charged: ‘The substantial value destruction has resulted in an exodus of institutional shareholders despite share price levels being around their lowest levels in 15 years, a clear vote of no-confidence in the Ricardo board. It is similarly notable that no Ricardo board directors have accepted responsibility for the failure of governance by offering to resign.’
Back in February, Science Group said its purchase of Ricardo shares was a ‘strategic investment’, and it promised to ‘engage with the Ricardo board and its major shareholders’.
Ricardo didn’t immediately respond to a request for comment early Friday.
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