A year ago, Carol Moffett made a killing of about £11 million when she sold Moffett Engineering to Powerscreen, a month before the Powerscreen share fell out of bed after the Matbro financial scandal first became public. Ms Moffett made an extremely smart decision at the time to take her money in cash rather than Powerscreen shares which are now about one-fifth of what they they were worth a year ago.
Another man who made the right decision when it came to choosing between hard cash and shares is Mike Enright, who sold his Walsh Western Logistics transport company to NFC last July for an initial £18.9 million with the same again coming over the next two years in an earn-out. Most people in Ireland, outside the transport industry, were barely aware of Walsh Western's existence, let alone that the company was worth £40 million.
Like Carol Moffett, Mike Enright took his initial £9 million in hard cash, and was not apparently tempted by the prospect of NFC paper. Smart move that, given that NFC shares have dived 37 per cent since that deal and are now languishing at a level where many in the City doubt NFC's future as a public company. The FT's Lex column spoke for many when it suggested that NFC was a real candidate to be taken private.
The fall and fall of NFC must be a major disappointment to Gerry Murphy, the former Greencore boss who was sent in a couple of years ago to sort the company out. So far, Mr Murphy has failed to deliver and the shares are at a five-year low of 117p even though NFC has made efforts to extricate itself from food distribution. Even a £307 million sterling buyback this summer has failed to put a floor under the share price, and the expected slowdown in the British economy does not augur well for a group whose main business is transporting goods around Britain. If anybody is unfortunate enough to have NFC shares, they have little option but to hold on or else take a bath. Mike Enright must have had a keen sense for a bargain when he opted for cash last July. And to think, his earn-out payments are in cash too!
