Silvermines, the engineering and technology group, signalled its intention yesterday to divest itself of its aerospace and electrical business and use the funding to invest in its security and broadcast divisions.
At yesterday's lively annual general meeting, shareholders were critical of the board for the company's poor performance last year when it made a loss before tax of £726,000 sterling (€1.1 millon) and for the share price, which is currently at 39p.
One shareholder, Mr Arthur Blake, said the share price was higher in 1974 than it is today and that it was the worst performing share on the Dublin Stock Exchange. He said the stock market did not like "mini-conglomerates" and the company did not have the management or the financial resources to manage its divisions. Despite opposition from the floor, a resolution was passed which gives the board the option of calling future a.g.m.s in Britain, although a video link-up with Dublin would be provided.
After the meeting, the new chief executive, Mr Ian Scott-Gall, said he was familiar with the group's telecommunications and security divisions since his days as managing director of Blick, a similar type company.
In particular, there were opportunities for Silvermines' subsidiary, Continental Microwave, to develop markets in emerging economies. Silvermines' strategy makes it likely that it will seek buyers for its aerospace subsidiaries Muirhead Vactric and Pickering Controls, in a sector which is experiencing consolidation. Both the aerospace and electrical divisions account for about half of Silvermines £114 million sterling turnover (€173 millon).
The chairman, Mr Bob Morton, said the board was "without question" taking responsibility for the group's performance. But non-core activities would be disposed of only if the price was right.
The company currently has a market capitalisation of about £36 million sterling (€55 million). The losses incurred in 1998, which amounted to £1.5 million sterling (€2.3 million) after tax, were due to an exceptional cost of £4.3 million sterling (€6.5 million) after the write-down of its investment in Automotive Motion Technology, in which it has a 49 per cent stake, and reorganisation costs. Mr Morton said in hindsight the Automotive deal was not a good one. He was not aware that TT Holdings, the British engineering group, was making efforts to increase its stake in Silvermines after building up a 6 per cent holding.
He added that the results for the first half-year of 1999 were expected to be disappointing on the basis of a slowdown of orders in the aerospace and security divisions. But order books had recovered and this would be reflected in the end of year results.
