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Technology Stocks : MONI - Marconi Nasdaq ADR -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (97)	9/5/2001 4:48:10 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 129

At last Marconi starts to listen: Victory for shareholders but it could be too late By Peter Bale, FTMarketWatch Last Update: 8:56 AM ET Sep 4, 2001 LONDON (FTMW) - Marconi shareholders scored a victory over the forces of conservatism and value destruction on Tuesday, securing the scalps of the chairman and chief executive. Lord George Simpson and Sir Roger Hurn fell on their swords at last, dumped after months of ignoring shareholders and trying to avoid blame for the crisis that has befallen the company. That was then, this is now Less than two months ago Marconi (MONI) (MONI) said this: "George Simpson has agreed to remain as chief executive for a further year." On Tuesday it said: "Sir Roger Hurn and Lord Simpson have today resigned." Marconi said the two went early because the company had finished its operational review faster than expected. Few will believe that. Hurn paid the expected tributes to Simpson and was in turn praised by the new interim chairman Derek Bonham. Very English. See main story on Marconi shake up. Simpson's silence, two months after he mounted a vigorous defence of his strategy and forced his deputy John Mayo to quit to satisfy shareholders' demands for blood, spoke volumes for the truth of the situation. In a year Marconi's market capitalisation has collapsed to £1.5 billion from £35.5 billion as the share price sank to 49 pence from £12.75. It's about to fall out of the FTSE 100. Shareholders will welcome Simpson and Hurn's departure but now face a difficult year of no dividends and no guarantee that new chief executive Mike Parton - a Marconi veteran - can deliver on a recovery. At best they may face a rights issue to raise new cash, at worst Marconi looks like it is being prepared for a takeover. What do you think? Take the FTMarketWatch reader poll. A victory for transparency But the omens are good that Marconi has at least started listening to shareholders and treat them like adults. Parton promised a new approach to investor relations, complete with U.S. style quarterly results - something shareholders and FTMarketWatch have been campaigning for. Of course the first instalment of those quarterly results included a spectacular profit warning for the first half after a £227 million loss in the first quarter. Among all the tough medicine - the end of dividends, the huge goodwill write-offs, the profit warnings, the write-offs of the inventory and the thousands of new job losses - in Marconi's statement on Tuesday was a welcome paragraph for shareholders. It said: "Marconi has adopted a new financial communications policy in order to establish a more regular dialogue with investors and analysts. Marconi will now provide trading updates within 10 working days of each quarter-end in addition to reporting its statutory interim and full-year financial statements." Let them eat cake Under Simpson Marconi resisted demands to shift from the half year and full year reporting system that Marconi had inherited from its days as The General Electric Co PLC under Lord Weinstock. See Chris Nuttall analysis of Simpson legacy. When its major industry peers were declaring profit warnings and predicting crisis in the telecoms equipment industry through the start of the year up to April, Marconi was silent. When it did speak Simpson said the company saw no such crisis. Within weeks its own house broker had slashed earnings and the July 4 profit warning became inevitable. The fiasco over the profit warning - which saw Marconi shares suspended for a full day with no word on why - cost Deputy Chief Executive Mayo his job and ultimately Simpson his. Through it all Marconi has remained a massively popular share with individual investors - even as institutions dumped their holdings. Week after week as the share price slipped, Marconi has topped the list of most-bought stocks at British online brokers. With Parton installed shareholders who've bought recently will be looking for some return on what they hoped was a bargain, while those who bought at the peak of £12.75 only a year ago will be looking for some sort of deliverance. ftmarketwatch.com{E9496FFF-136F-4332-B21F-50746CFA898F}