It is now some weeks since the EGM
when the destiny of the Society was subject to a proposal to convert to a plc with the
later likelihood of a float on the AIM. I was disappointed that the proposal was rejected
as I believed then, as I do now, that it offered an immense opportunity for the members to
continue to enjoy the unchanged business benefits of membership of the radio circuit and
also to acquire equity shares in their business and the wealth they have created and will
continue to create in the future. Furthermore, there was the potential to share the burden
of future financing with outside shareholders with members also having the possibility of
financing investment themselves receiving in return additional shares with a value. A
better deal than spending money with no return on subscriptions or through the accounts by
way of interest on bank loans.
Necessarily, the proposal was
complicated and challenged even experienced investors but I felt the circular was as
user-friendly as possible and in combination with articles in Call Sign conveyed the facts
of the matter properly. There is no simple way to present such information which also
meets the technical and legal requirements.
I was also disappointed that numerous speakers at the
meeting dwelt on the most extreme and negative conclusions to be drawn from what were
completely normal, conventional and, above all, innocent provisions. In many instances
trivial points were portrayed as critical and exaggerated the adverse 'spin'. Nonetheless, the majority required
to approve the proposal was not achieved and the Society will
therefore continue as it always has. In view of the excellent prospects for this year this is doubly disappointing for members. Once floated the shares might well have shown a substantial increase in value over the average allocation of ,3,500 per member.
ANOTHER BITE AT THE CHERRY?
Some members have asked me whether a similar proposal could be made in
future. Others who were against the proposal, have confusingly told me that in the end
conversion to plc is the only way forward. I can only agree and say that I believe it will
be repeated but it has to be before it is too late and it may not be so good for members
at that time, only time will tell. I believe the industry will change so that only the
financially strong and flexible will prosper. The Friendly Society structure encourages
compromise, caution and a 'don't rock the boat'
attitude. Progress will therefore always be slower than in more vigorous and adaptable
organisations.
Without adopting a more commercial structure and
offering members the opportunity to hold a valuable and tangible stake in their business
DAC will be at a
disadvantage to
faster moving competitors, however, it will take courage to commit to repeat the process.
Interestingly the current edition of Call Sign carries an interview with the founder
chairman, Bonnie Martyn, in which he suggests that adopting the Friendly Society structure
was a missed opportunity.
Apart from the financial benefits now lost to the
members and the Society, other immediate consequences are less easy to determine and, for
the time being at least, the day to day activities will remain largely unaffected.
CURRENT TRADING
I am sure you know better than I that the weeks running
up to Christmas broke all records for turnover and trips completed. This means that our
financial position is in line with the demanding budget set for the year and barring a
major downturn in business, the records set last year may well be matched, or even
surpassed. This also reflects the close attention being paid to costs and applying value
for money tests to all aspects of the operation. It was also very reassuring to know that
V6 TAXI could cope with the pressures of the busiest days ever known.
For your information the following statistics might be of interest:
1997-8 compared to 1996-7 (which was a record year) - 16 weeks to December:
Turnover +27%
Surplus +48%
Payments to drivers +29%
Trips +12%
Alastair Hill
