Source BioScience shareholder slams “unwelcome” payments
A shareholder in Nottingham-based laboratory services firm Source BioScience has hit out at what he sees as “unwelcome” share payments for the company’s directors.
Roy Edwards, investment manager and partner at RDI Private Fund Management, a shareholder in Source BioScience, says that an increase in directors’ share-based payments from £90,000 a year in 2014 to £360,000 last year, “puts in very serious doubt” the well-running of the company.
Yesterday, Source BioScience posted record-breaking results for the year-ending 31st December 2015. The firm saw revenues rise from £25.2m to £26.3m, whilst profits before tax jumped from £1.4m in 2014 to £2m last year.
Posting on LinkedIn, Edwards said: “We have been waiting for these results to be published as we are currently long term shareholders in this Company. Overall, it is pleasing to see that progress and profitability continue to advance at what we can determine as a reasonable rate and that net debt is reducing. The Group has a very strong business model and opportunities for further growth are apparent across the Laboratory Services and Products divisions.”
However, he added: “The one area that has caused us some annoyance is buried within the financial data supplied in the year-end results update.
“Share-based payments for year-end 2015 is a massive £366,000 compared to the previous year’s £90,000. This has of course had a detrimental effect on the Companies overall profitability.”
Edwards said that, in RDI’s view, these sums being taken out of the profits “benefit the very few.”
He added: “Whilst we accept there should be director appropriate renumeration, our own view is that this increase is exceptional and not that welcome. If this trend were to continue we would have serious doubts around the benefits of holding what can be regarded as a well-run company.
“We will continue to hold this in the interim and hope to see continuing progress of the Group in 2016 and beyond, and that its ambition to become an established and successful international Laboratory Services and Products business is realised.”
When we contacted Source BioScience a spokesperson said they had nothing to add to Edwards’ comments.
