REVELATIONS this week of monstrous losses and a purge of administrative and operating systems at Mackie International, the beleaguered Northern Ireland engineering and textile group, threw not so much a spanner in the works but more a renegade JCB on full throttle. The real and psychological damage is considerable, presenting its newly appointed trouble-shooting chief executive Sul Sahota with plenty of trouble and plenty of targets. Sahota, who slipped into the hot seat in March, faces a formidable task of corporate engineering to restore both market confidence and group profitability.
Once an example of business excellence in a reviving Northern economy, the catalogue of disaster at Mackie kicked in the previous June with a profit warning and a £6.7 million rights issue, which subsequently flopped. In October, half year profits collapsed 21 per cent, there was another profit warning and the share price nose dived.
Almost as soon as Sahota had settled in the already uncomfortable temperature in the hot seat neared Death Row proportions, suspension of the share listing in April accompanied by a warning that 1966 results would be "restated". The word restated turned out to be fanciful understatement, the group this week announcing that reported £440,000 annual losses for 1966 had exploded to £7.2 million. The boardroom Axminster turned a deeper shade of red as executive heads metaphorically parted from shoulders with the revolutionary zeal of an executioner in a Jeddah car park. Out goes Mackie chairman and one-time owner Pat Dougan, along with finance director Sean Harte. In comes the aptly named London legal firm of Slaughter & May (hem) as company lawyers, perhaps a grim omen of more bloodletting to come in the courts. The company's financial advisers have also been replaced in this all embracing putsch.
Despite being rebuffed by shareholders when the begging bowl was produced last year, Mackie's desperate plight has forced it back to the market for survival capital. A £5.2 million rights issue is broached at a knock down 20p a share, a whopping discount on the 113p suspension price, eons away from the 380p the shares commanded at their peak 18 months ago.
The current drama is a far cry from the halcyon days of November 1969 when President Clinton visited Mackie, a set piece for much talk of the company personifying all that was best in Northern Ireland business. Unfortunately nostalgia, unlike goodwill, cannot be banked.
