Burns-Anderson looks on brink of collapse
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Your support makes all the difference.BURNS-ANDERSON, the recruitment agency and financial advice group once headed by the television troubleshooter and former ICI boss Sir John Harvey-Jones, looked on the brink of collapse last night.
The company asked for its shares to be suspended 'pending clarification of the company's financial position'. The phrase is a City euphemism often used by companies about to appoint receivers or administrators.
Fimbra, the financial regulator, said it had no immediate concerns for investors using the group's financial advice arms.
Burns-Anderson shareholders are due to meet on Tuesday, a meeting forced on the company when its net assets fell to less than half its pounds 4m of called-up shared capital.
The group's losses long ago wiped out its shareholders' funds. By the end of last year it had a net deficit of pounds 8.6m while still bearing short-term debt of pounds 14.6m.
Derek Boothman, the chairman, has been in talks with National Westminster and other banks in an attempt to restructure the group's borrowings and share capital. Yesterday's announcement indicates these talks may have run into difficulties.
When Sir John joined Burns-Anderson in 1987, the plan was to build a network of independent financial advisers. Under the chief executive Alan Moore - Sir John had been his client - Burns-Anderson started an acquisition spree, buying up financial advisers and recruitment consultants.
Many of the deals involved substantial earn-out payments, which became increasingly onerous as the group's share price went into free-fall. From a 1987 peak of 238p, shares had declined to 2p yesterday.
When Sir John retired as chairman in 1990, he found a heavyweight replacement for Burns-Anderson in the form of Mike Woodhouse, deputy chairman of Courtaulds. But Mr Woodhouse was unceremoniously unseated at last year's annual meeting - much to the surprise of the then chief executive Phil Cox, who has since joined Asda as finance director.
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