Powerscreen made price move at Matbro ahead of share issue
POWERSCREEN International, the Northern Ireland engineering group, moved to raise prices at its Matbro subsidiary more than a fortnight before a share issue last December and nearly two months before it announced £46.7 million of losses caused partly by mis-pricing, according to todays Financial Times.
Executive management said at the time they had been unaware of Matrbros problems before December 17 and 18 when Powerscreen issued 3m shares at 600p each. However Matrbro sales staff claim the new managing director James Nicholson-Smith had told them on 1 December that prices were uneconomically low and that they were told to withdraw prices already agreed with customers. The companys market capitalisation has fallen from a peak of £680m last year to £178m.
Powerscreen announced to the stock exchange yesterday that preliminary findings of the investigation by KPMG into losses were “broadly as set out in our statement of 27 January”. That was when the company said it had dealt with the problems “with all speed and the utmost rigour”.
Matbro has since been reorganised with job cuts. Sales director Brendan McGrath has left.
- Financial Times 20/03/98 page 25