Case 7 — Woodpecker plc

There have got to be barriers there and everybody has got to be comfortable but I think we view them more as a partner, someone we can bounce ideas off and with their experience they can help the business. (Richard, finance director)


The Woodpecker Group plc is a FTSE small engineering company that manufactures its own range of products and produces spare parts for other companies. Recently the group has diversified into a wider range of products and is now expanding its overseas market. Turnover and profit before tax have in recent times declined year on year. There has been an increased reliance on the market in one particular country [Country H] and the volatility of exchange rates has impacted on results.

The company was founded by its current chairman. Following expansion into overseas markets, it was floated to permit more capital to be raised, although control remains with the chairman's family. Consequently, the shares are not particularly liquid and there is, therefore, little analyst following, although there are some fairly significant institutional shareholders. The view was expressed that they were still attractive to shareholders who wanted a strong dividend and who valued the freedom that management have to take longer-term decisions which might not necessarily produce a short-term gain.

The chief executive, Charles, and a number of managers are based in [Country H), although the accounting function is based ...

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