31st Mar 2025 10:44
(Alliance News) - Science Group PLC on Monday accused Ricardo PLC of trying to "deflect attention from [its] core issues", after Ricardo criticised its shareholder's call to oust Chair Mark Clare.
Ricardo, a Shoreham-by-Sea, England-based environmental and engineering consultancy, on Friday said its board opposed Science Group's demand to remove Clare.
It said the move would be "contrary to the interests of Ricardo's other shareholders" and voiced its belief that Science Group aims to gain effective control of the board by replacing the current chair with its own pick.
Science Group is Ricardo's largest shareholder, with a 16.85% stake. Since it took an initial 8.5% stake in Ricardo in February, the science, engineering and technology investor has criticised Ricardo's governance and performance and hinted at requisitioning a shareholder meeting to force changes.
On Monday, Science Group said Ricardo's announcement on Friday "continues to try to deflect attention from the core issues", adding: "Contrary to the 'victim' narrative presented by the Ricardo board...[It] seeks to blame external factors for its under-performance rather than address its own mismanagement."
The Cambridge, England-based firm also took aim at Ricardo's statement that trading remained in line with expectations, which it said "conveniently omits the fact that these expectations were significantly downgraded only a few weeks ago".
"In stark contrast to the Ricardo interim results...Science Group reported robust operating margins, record earnings per share and strong cash conversion," Science Group said, "despite the same challenging "market headwinds" that Ricardo blamed for its weak performance, poor cash flow, and materially downgraded forecasts.
"Science Group actually delivers the margins that Ricardo aspires to."
Science Group credited its "record [full-year] profitability" to "effective governance and disciplined cost and operational management".
Conversely, it attributed Ricardo's performance to its "failure to manage costs and productivity".
Finally, Ricardo's claim that replacing Clare with a Science Group nominee would give it "effective control...without paying a premium" is "blatantly absurd", Science Group said.
"This repeated claim by the Ricardo board is also selective and hypocritical since a current Ricardo director is in fact a nominee of a major shareholder yet there has been no similar accusation," Science Group said, charging: "Therefore, and consistent with the lack of substantive responses to Science Group analysis, it must be presumed that the real concern of the Ricardo board is the scrutiny and governance improvements that Science Group would demand, to the benefit of all Ricardo shareholders."
Science Group concluded that "the Ricardo board remain in denial and seek to blame external factors rather than accept responsibility", continuing: "It is clear that Ricardo PLC needs a catalyst for change and the position of the chair is untenable."
Ricardo didn't immediately respond on Monday morning.
Shares in Science Group were up 2.1% at 439.00 pence on Monday morning in London. Ricardo was trading 1.9% lower at 254.00p.
By Emma Curzon, Alliance News reporter
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