The Retail Motor Industry Federation did a stunning deal in buying back the training business that it sold in May 2006 to Carter & Carter, according to filed company data. RMIF made £25.5 million from the sale of Remit.And it was bought back from the receiver in April this year for just £62,500, according to accounts to the end of 2007 that have just become public.
In a mastery of understatement, finance director and company secretary Kevin Waterman said: “From the RMIF point of view, the sale was a good one. We were very pleased at the price at which we bought it back.”
In May of last year, the chairman of C&C, Phil Carter – UK Entrepreneur of the Year 2006 – was killed with his son in a helicopter crash.
A month before the accident shares in his company peaked at £12.82 but at suspension in September were just 82.5p, valuing the firm at £34.3 million.
It was not exactly the same business because some of the contracts had gone – in particular sub-contracted manufacturer training businesses. But there are still around 3,000 apprentices and adult courses under way.
And RMIF now has only 51% of the repurchased business because it is a joint venture partnership with Rob Foulston, the chief executive, who was a Deutschebank lawyer. He introduced the deal to the RMIF.
The money has been banked and awaits good acquisition ideas. Happily it went to treasury bonds and fixed interest so missed the impact of the Stock Market collapse.
Waterman is inclined to leave the money where it is and await developments.
“It is quite likely that the value of businesses we might want to buy will be declining,” he said.
The list of favoured acquisitions includes legal services, lobbying and technical support.
At the end of 2007, BigOil.net was purchased for less than £1 million. That was a website business giving real time market rates for downstream oil commodities.
Meanwhile, the core business for RMIF will be made more efficient. It has routinely been unprofitable (it is a not-for-profit venture) though a good cash generator.
The accounts show that its pre-tax losses in the last period were annualising at £600,000 on sales annualising at £3.7 million.
The cash in the balance sheet is now £14.3 million in addition to property assets of £8 million, which puts the association in its best financial position in memory.
The accounts also show that Matthew Carrington, who resigned as chief executive in October 2006, received a pay-off of £150,000 for loss of office. Stephen Ramsey who was managing director of Remit and moved with the business, also received compensation of £87,000.