Mowlem’s outgoing finance director Gerry Brown shocked investors and analysts at a post-results briefing by launching a tirade against the press and City
According to those present, Brown felt that reports suggesting that his departure in May was linked to “accounting issues” in Mowlem’s M&E business were irresponsible.
The company itself had referred to “accounting issues” in a trading statement to the stock exchange in January, but Brown felt that the phrase had been misleading. He added that some reports had suggested financial impropriety, which was “unjust”.
One onlooker at the meeting said that Brown’s audience were “fixated on their shoes” as the scene unfolded.
The outburst occurred after Mowlem’s annual results announcement last Thursday. The contractor reported a £7.4m loss in 2004, associated with its Australian building division and problems with poorly performing UK contracts and within its M&E business.
The City had been pre-warned about the loss in a trading update in January. This coincided with the announcement by Simon Vivian, the contractor’s new chief executive, that Brown would be leaving the company after 32 years.
A spokesperson for Mowlem said Brown’s reaction was understandable: “Gerry was upset and felt aggrieved,” he said.
Brown felt it was unjust that some reports suggested impropriety
As a result of the poor financial performance, Mowlem slashed its full year dividend from 7.9p in 2003 to 5.4p. Analysts at ABN Amro said this was “a sensible move given the retained loss, although it may disappoint some investors.”
Vivian said he had completed a review of the business “which has led us to take a more prudent view of profit recognition and contract valuation”.
He added: “Improved financial and commercial controls are being introduced with tighter management controls over work in progress.”
Shares dropped 4% to 195.75p in response to the announcement on Thursday.
Brown’s successor, Paul Mainwaring, will take up his post before Mowlem’s annual meeting in May. He joins from logistics group TDG.