Mears Group has been forced to call a general meeting after a shareholder called for the removal of chairman Bob Holt.
Frankfurter Aktienfonds fur Stiftungen, which holds 8.9 per cent of Mears’ shares and is advised by Shareholder Value Management AG (SVM), called for shareholders to vote on removing Mr Holt as chairman and appointing Andy Hogarth as a non-executive director to replace him.
SVM said it believed Mr Holt (picured) was “unable to devote sufficient time to the company” due to him holding seats on 10 different company boards, which includes as chair of Lakehouse.
Mr Holt has been at Mears for more than 21 years, which SVM claimed affected his independence and led to “sub-optimal decision-making” at board level.
It also noted that Mr Holt did not hold a shareholder stake in the company.
A spokesman for SVM said: “We believe that the chairman of the board of Mears Group has continually failed to challenge the status quo and to remedy the situation, despite deteriorating results, a stagnant share price and faded shareholder value.
“In our conversations with the company, it has become clear that the current chairman lacks the will to enact much-needed change that only a new independent chairman can bring.
“It is our view that Mr Holt has become an impediment to the effective running of the company.”
Mears Group, which specialises in housing mantainance and in-home care, reported a £22.1m pre-tax profit on revenue of £900m for the year to 31 December 2017.
The company increased its total dividend pay-out from £11.5m to £12.2m last year, but its share price has fallen over the past 12 months from £4.95 at the end of July 2017 to £3.44 today.
SVM argued that removing Mr Holt and replacing him with Mr Hogarth would help the chief executive David Miles build up the core business and increase shareholder returns.
“SVM remains very supportive of the current executive team and believes that their operational skills, alongside the experience of a newly appointed and independent chairman […] can successfully drive value creation for shareholders going forward,” the adviser said.
Mr Hogarth is currently a non-executive director for recruitment company Staffline and was previously CEO of oil and gas specialist Pipeline Constructors Group.
A general meeting to vote on Mr Hogarth’s appointment and Mr Holt’s removal must now be held within 28 days.
A Mears spokesman said the company would follow the rules for holding a meeting but would not comment further at this time.
Mr Holt has been contacted for comment.