NMR slashes number of farmer shareholders

National Milk Records has gone ahead with a complex consolidation scheme that has more than halved the number of registered shareholders.

The company, which had more than 7.3m shares divided among 25,000 mainly dairy farmer shareholders, announced details of the plans earlier this month, and they were passed by a majority vote at a general meeting yesterday (24 November).

It means shareholders with less than 320 shares, who did not take NMR up on its offer to increase their holding to at least 320, will have their shares bought back at a price of 28p each and will shortly receive a cheque for the relevant amount.

Managing director Andy Warne said the process had cut the number of NMR shareholders to 6800, but had made the share register more consistent with the size of the business and the number of active dairy farmers, as well as reducing admin costs.

The company had grown concerned that many original shareholders were no longer involved with dairying and wanted to sell shares, but had been unable to do so due to lost share certificates, he said. “Replacement certificates cost around £25, which is more than a lot of shareholdings are worth, so people have just held on to them.”

The 7m shares (with a nominal value of 10p) were consolidated on a 320-for-one basis into temporary “Interim Consolidated Shares”. Any fractions from shareholdings of less than 320 shares or not divisible by that amount were sold at 28p per share and cheques sent out. Fractional shareholders will not receive any payment for share holdings valued below £5.

Because the interim shares had a nominal value higher than normal at £32, NMR sub-divided them into “New Ordinary Shares”, with a nominal value of 10p each. Shareholders will receive a share certificate for their new shares shortly.

Mr Warne acknowledged NMR had been approached by another investment company offering a higher price for shares, but said the offer came too late and the general meeting could not be rescheduled. The share price of 28p was the closing price on 27 October, the latest date prior to the posting to shareholders.

Background to NMR

When the Milk Marketing Board broke up, dairy farmers were compensated with shares in Dairy Crest, Genus, Milk Marque and NMR, allocated in proportion to milk production in 1994.

NMR was incorporated in 1997. Due to the disparity of production, a large number of shareholders were allocated a small number of shares, which carried a nominal value of 10p.

NMR grew concerned by the lack of trading of its shares and the fact many shareholders were no longer engaged with the business or dairy farming.