Jim McColl hits out at lack of City support

SCOTTISH entrepreneur Jim McColl says the City's failure to support one of his key engineering businesses is preventing him from embarking on a major acquisitions spree.

• Jim McColl

McColl has expressed frustration at the low valuation placed on Clyde Process Solutions and he will consider a merger or other options in order to grow the company.

It is expected to report another strong year of profits growth this week but McColl says the firm, part of his international engineering group, is valued at half its true worth on the Alternative Investment Market.

If investors fail to drive up the share price in response to Tuesday's results he will be forced to look at a number of options for the company. He is appointing advisers to consider the way forward.

One is a possible merger with another firm to scale up the business. Another could be de-listing the company, though he cautioned against such a move.

"I am disappointed about the continuing value placed on the company by Aim," he said. At around 16 million, he says it compares unfavourably to the net asset value on the balance sheet of 37m.

"We will be reviewing options to see if we can maximise value for shareholders. I am not ruling anything in or out."

McColl, one of Scotland's wealthiest individuals, said he had detected a trend for institutional investors to close their positions in smaller companies and move to the main market.

He claimed Aim had become "dysfunctional" by not giving a true reflection of company values. "We have a growth strategy for this company which includes organic growth and acquisitions. But it is held back from acquisitions because of the share price. It is very frustrating," he said.

"In the current market there are a number of opportunities for us. This is the time to make acquisitions and grow the business. We are working with an adviser to look at a range of options and consider which would be the best way to get the share price up."

McColl is prevented from buying more shares himself because he already owns about two-thirds of the 29.9 per cent maximum held by himself and other directors. They cannot act alone as they are considered a "concert party" by the authorities and would have to bid for the whole company if they acquired more stock.

The share price closed on Friday at 39.5p but McColl believes a buyer would have to pay about 85p for the company. At the halfway stage the company saw a 55 per cent surge in profits and while the second half is thought to have been slower than in previous years it is usually the faster growth period.

"We hope to see a lift in the share price when we present the results," said McColl, who will be presenting to institutional investors later in the week. "If the reaction is positive and drives the price up then maybe we won't need to do anything. A lot depends on how the market reacts."