Nick Tod, ousted chief executive of independent ATM operator Scott Tod, is calling on shareholders to reinstate him and depose chairman David Massie who removed him in August following a profit warning. The news comes as the AIM-listed vendor reports heavy losses for its first full year as a public company.
Tod, whose father founded Scott Tod in 1978, owns 27% of the firm along with his wife. He was ousted in August after disagreeing with the board over the future strategy company and following a profit warning that saw the vendor's shares halve in value.
It was rumoured that Tod was keen to continue with a strategy based around expansion of the firm's ATM networks, while the board felt it more appropriate to work the current estate harder by re-locating underperforming machines.
According to press reports, Tod is understood to have amassed the support of shareholders representing around 50% of the company and will requisition an extraordinary general meeting to reinstate him.
The motion is thought to call for the removal of all three current board members - including chairman Massie who holds 12.9% of the firm and acting CEO Lawrence Watts.
The news comes as Scott Tod reports pre-tax loss before tax, goodwill amortisation and impairment of £1.1m for the year ending 30 June 2005, compared to a profit of £399,000 a year ago, mainly due to the loss of two major contracts - accounting for some 700 ATMs - and further costs associated with implementing chip and PIN technology.
Despite this the group's turnover rose to 10.2m, compared to £6.7m a year ago.
However Scott Tod says deployment and operating of ATMs accounted for 74% of turnover - £7.62m - missing projections for ATM income by £2.3m. The company says the shortfall was due to lower transaction volumes following the press criticism of fee paying cash machines and the upgrading of the ATM estate to chip and PIN standards.
Massie says it is clear that a number of poor business decisions were made during the year - mainly that a large number of the new ATMs installed were in under performing sites and it will continue to relocate as many under-performing units as possible.
The group is also splitting its business into distinct "profit centres" and says it has also eliminated certain obvious areas of waste. But Massie says further work is necessary to balance resources and the emphasis is on building better controls, redeploying unprofitable ATMs and increasing transparency.
The vendor has also recruited John Dixon as finance director who will start work at the beginning of December 2005.
Scott Tod shares were down six per cent in morning trading to 15.50 pence.