While not exactly Top of the Flops, the last 12 months have been anything but easy for these 10 individuals.
Of course, loads of people have bad years every year. But, in the business community at least, relatively few people should have found 1997 a real shocker - a strong pound and the recent market dive aside, the last 12 months have been about as good as it gets. There are, however, those who've endured rather than enjoyed 1997. Some, like Lord Sterling, have been victims of circumstance. Others have no such excuse. No one made PDFM's Tony Dye take £7 billion out of equities and put it into cash while the markets surged. And then, of course, there are others for whom '97 was always going to be bad. Liam Strong, for one. Our list doesn't claim to be definitive - Andrew Regan, for example, is absent, though his role in making Sir Chips Keswick's year one to forget was crucial.
What the list does aim to provide is a look at ten prominent business people you may thank God you weren't in 1997.
Chief executive of RJB
At the end of 1994, Richard Budge, flush with a wad of BZW's cash, paid £815 million for the bulk of what was left of Britain's coal industry.
Initially criticised for paying over the odds, it soon seemed that Budge had snapped up a bargain: with coal commanding a high price and the timely breakdown of a couple of nuclear power stations, Budge's baby boomed. By April 1996, the shares which had floated at 250p were trading at comfortably over £6. But then everything started to go horribly wrong.
First, the world price of coal fell sharply, a difficulty that was exacerbated by the soaring pound which meant that foreign competitors could all too easily undercut it. Second, RJB has always been the beneficiary of Tory-brokered contracts between the coal industry and Powergen, National Power and Eastern Group, whereby the generators agreed to buy 28 million tonnes of the black stuff a year, the bulk of RJBs output. These contracts are up for renegotiation next year; the new Government refuses to step in and it is likely that much of the generators' business will go elsewhere.
Finally there is Britain's new-found enthusiasm for meeting emission targets for greenhouse gasses and, sadly for Budge, switching from coal to gas is an excellent way of achieving these. Thus Budge finds himself at the helm of an increasingly uncompetitive firm in a declining market. The City seems gloomy, too. In October, Dresdener Kleinwort Benson issued a sell note and predicted declining profits; shares have since nose-dived to well under £2 and look set to continue falling. Moreover, in the longer term, while it is unlikely that the UK's coal industry will disappear completely, 1997 may, rather alarmingly, be just a taste of what's ahead for Budge & co.
Fund manager at PDFM
Over a couple of years, Tony Dye, PDFM's star fund manager, has bet the kind of money that would make even the most hardened Vegas veteran blanch. Dye's wager was that the stock market was overvalued and to decrease his exposure to the inevitable readjustment he switched some 15% - or £7 billion - of PDFM's funds out of equities and into cash. Now, Dye may well have been right but, as Keynes pointed out, knowing what an investment is worth may not be as useful as knowing what everyone else thinks it is worth. And everyone else thought it was worth more - since Dye's disinvestment the market has continued to grow, even allowing for the October crash. What's more, his approach tends to look for real value in shares and has, rivals claim, led to large holdings in underperforming companies and smaller holdings in areas such as banking which have been beneficiaries of the boom. Dye comes with a formidable reputation and has commented that he is prepared to wait as long as it takes for a market crash; whether his clients are as patient is another matter.
Chairman of WH Smith
WH Smith used to be one of the UK's strongest High Street brands: no longer. The group's star faded as it diversified and its core chain lost ground to other retailers such as the supermarkets which moved in on its traditional turf: bookselling and newspapers. Last year, 200 years of unbroken profitability ended when provisions and disposals resulted in a £194-million loss. It was against this less-than-halcyon backdrop that Hardie's troubleshooting chief executive Bill Cockburn announced he was quitting to join BT. Hardie then attracted flak over Cockburn's successor, Richard Handover, an internal promotion who was seen by many as somewhat second rate. Smith's management spent the summer denying the break-up rumours that were flying around only to have them come true when Tim Waterstone, founder of the eponymous chain of bookshops, forced their hand. The company has now begun meeting institutional investors to devise a restructuring package to boost its lacklustre shareholder value. In October, Hardie announced that he would leave next year; the reason, according to reports in the press, is that he is sick of being sniped at. And if this is the reason, it is firmly rooted in reality. At the AGM four days later, the board faced a barrage of criticism, with Hardie himself coming in for protracted personal heckling.
Ex-chief executive of Ronson
In business, being a 'personality' is a double-edged sword - as long as you're successful, any larger-than-life behaviour merely serves to bolster your image as a maverick playing outside the rules; start losing money, however, and people are liable to take a dimmer view - as in Howard Hodgson's case. Having made a storming success of the family funeral business and written the tastefully entitled How to Become Dead Rich, Hodgson bought the ailing Ronson in 1993 and refloated it in '94. Initially, his magic touch seemed to be working but, in early 1996, the problems began.
January saw a warehouse fire for which the company was £4 million underinsured; the news got out this March and the company warned that its results were likely to show a loss of £1 million. Hodgson's position was further weakened by the small matter of his finance director, Christine Pickles, also being his lover. Later, in June, the company revised its profits warning to £2 million and the boardroom-to-bedroom duo resigned. Ronson's eventual loss was £2.2 million, and it recently posted a six-month loss of around £5 million, a figure the business blames squarely on its former boss.
Hodgson and Pickles are now suing the company for the £500,000 entitled to them under their contracts: Ronson's new finance director's response is that he's ready to see them in court next year.
Chief executive Laura Ashley
To be fair, when Ann Iverson stepped into the driving seat of Laura Ashley in 1995, the business was already in pretty bad shape, having haemorrhaged some £60 million in the five years following the death of its eponymous founder. Iverson, an American with a tough, ballsy reputation charmed the City, promising to cut costs and return the company to profitability.
For a while she seemed to be delivering. The shares powered-up from a shade over 60p to 219p and, in '96, she delivered a £16 million profit, the first since 1989. Despite the odd rumour of boardroom 'disagreements' the share price remained healthy right up until April this year when it became evident that all was not English rosy. Iverson let it slip that the company had bought a little too much summer stock - those unwanted frocks would eventually cost the company £4 million. Shares fell. A couple of weeks later, the merchandise director and financial controller jumped ship. This coincided with Iverson's pay packet growing considerably and the inevitable personal attacks. In August, Basha Cohen, the director of new design and buying, left for US giant Tommy Hilfiger.
At the time of going to press, Ashley's shares stood at 47p, appreciably less than when Iverson took the helm. City opinion ranges from the view that her style makes her a good catalyst for change but a poor long-term bet.
Sir Chips Keswick
Chairman of Hambros
The latest blow for beleaguered Hambros came in October when the City institution admitted that its rival, Schroders, was advising it on improving performance - which, with its shares at around half their 1994 peak of 417p, has been disappointing to say the least. And returns on its banking activities are reckoned to be around a tenth of what they could be. Poor performance, however, has been but one of Sir Chips' problems. In April, the bank backed Andrew Regan's decidedly underhanded bid for the Co-operative Wholesale Society and was caught with leaked confidential documents in its Tower Hill offices. Three Hambros big wigs quit over the debacle, Hambros paid the Co-op a hefty settlement, received no money from Regan's bid vehicle (which went into liquidation) and Sir Chips found himself making an unprecedented and very public apology.
Hambros still enjoys a fair amount of goodwill in the City but with increasing calls for a break-up, most vocally from its rebel shareholder, Regent Pacific, and the unwelcome attention of the UK active fund, it is possible that Sir Chips Keswick will be the chairman who presides over the final days of this 150-year-old City institution.
Ex-group chief executive of Pilkington, now chairman of Harden MacLellan
Roger, said chairman Nigel Rudd in May, has done a good job, but not good enough. And with that, after five years, Leverton left Pilkington, the troubled Merseyside glassmaker. Pilkington's problems were threefold: the company was not as efficient as its European competitors; European glass prices were falling; and, finally, the strong pound was adding to its competitive problems. When the group issued its third profits warning under Leverton and the shares plunged from over £2 to around the 110p mark, Pilkington's non-executives wasted no time in giving Leverton his marching orders, replacing him with Paulo Scaroni, an Italian with a reputation for aggressive cost cutting. Leverton's £1 million pay-off must, no doubt, have cushioned the blow somewhat and, given the subsequent pick-up in share prices, it was probably a price worth paying. Leverton managed to land himself another job, as chairman of Harden MacLellan, the engineering process group, though as Harden's market capitalisation is somewhat under a tenth of Pilkington's its probably not quite the same.
Sir Desmond Pitcher
Executive chairman United Utilities
Forcibly kicking a chairman off your board is no mean feat, as United Utilities has discovered: after months of pressure from City institutions Sir Des has finally decided to vacate the executive chairman's chair. And it is that 'e' word which has been the root of the problems. For with an executive chairman and a chief executive United Utilities effectively had two people doing the same job. Thus, late in 1996, Brian Staples, the company's second CEO (the first resigned) began canvassing support to reduce Pitcher's considerable powers. Naturally Pitcher didn't like this one bit and garnered sufficient support to have Staples ousted. Relations between the two are believed to have further soured when Staples left his third wife for... Sir Des' secretary.
Clearly the City thought that losing two chief executives in so short a space was careless, and Sir Des spent most of the autumn in an awkward pas de deux with his shareholders. Something had to give and, to the delight of the City, it was Sir Des. His replacement, Sir Christopher Harding, will be a non-executive chairman and, as the FT put it 'Sir Desmond was understood to have had little involvement in the choice' (of his replacement).
Executive chairman of P&O
P&O is in fact not doing too badly: its share price is up and its results have been reasonable. Nonetheless, 1997 has been, to put it mildly, frustrating for its chairman as he waited for the go-ahead on the merger of his company's cross-Channel ferry operation with that of the Swedish Stena Line. In July last year, Ian Lang, the then secretary of trade for trade and industry overruled the director of fair trading, lifting a 17-year ban on the two companies joining forces. They immediately began to make plans to do so. The plan was referred to the Monopolies and Mergers Commission and to the European Commission. There have been plenty of meetings.
Lord Sterling has held out the possibility of the merged company offering concessions and, a year later, still no word. At the moment, four of the putative company's eight directors are at home on full pay and neither company can think very seriously about its future. On top of a frustrating 12 months, Sterling has attracted some criticism for P&O's lack of focus - despite some disposals, the group is a rather unwieldy conglomerate with a hotchpotch of interests - Sterling's vision, say his detractors, may not be the one for the 21st century.
Former CEO of Sears, now CEO of WorldCom's International Division
For Strong, 1997 hasn't been the only bad year; rather it has marked the end of a bad five years, during which he has held the post of chief executive at the troubled retail group, Sears. Initially Strong was hailed by the City as a knight in shining armour. But his image gradually tarnished until, last year, his ill-fated attempt to sell the Saxone and Freeman Hardy Willis chains to Stephen Hinchliffe's Facia Group (which then went bust resulting in provisions of £74 million) hardened hearts in the City irrevocably against him. In April this year, Sears announced that its profits would be down 16% and issued the third profit warning in two years. Strong stepped down, received a £465,000 pay-off and was savaged in a number of quarters - most notably the tabloid press - as having been rewarded for failure. Indeed, so powerful was the unsuccessful whiff about Strong that the City rated his chances of picking up another worthwhile UK position as zilch. But Strong's lousy year at least ended on a bright note: in October,
he clinched the position of chief executive of the International Division at WorldCom, an appointment many have diplomatically described as controversial.