It’s not really a windfall, is it?

Engineering company’s founders, aged 80 and 83, set for £2.6bn windfall

Selling a company founded near 50 years ago isn’t, really, a windfall.

14 thoughts on “It’s not really a windfall, is it?”

  1. Off topic but if anyone has the time (and a stronger stomach than mine) will they be listening to Spud on Radio 2 this afternoon? For reasons I can’t fathom, The man who claims that we have a fascist government deliberately killing half a million people with its vaccine policy is on the Jeremy Vine show at 1.30 to tell us why whatever Rishi Sunak does will be wrong and that all we need to do is print money and tax rich people.

  2. Sadly, “windfall” is exactly the right time for the current culture.
    A lifetime of hard work, stress, employing people and making things people want to buy: well that’s just creating pollution and exploiting people, got nothing to do with the value of the business, which just appeared suddenly: probably his chums in the city wot?

    “I want it. I want it NOW, and I don’t want to pay for it. I don’t care who does pay for it, just so long as it isn’t ME!!!!”
    That was a party political broadcast on behalf of just about every party there currently is. The only UK politician that differs is called a fruitcake.

  3. Given that the current market cap of Renishaw is just over £5bn and the 2 founders own about 53% of the shares, they might be holding out for a little more than that. It seems that they want to sell it to a proper company rather than a bunch of private equity spivs, so the candidate pool is quite limited. The obvious candidate, Halma, is worth around £8.8bn, so I hope they haven’t left it too late. They are in their 80s, after all, and the last couple of years of trading have been a bit disappointing. The share price ramped up 50% last year after a couple of years of declines. I guess the vultures were expecting Covid-19 to do its bit

  4. Tim the Coder, that’s like the two Jewish fella’s meeting in the street. One say to the other “Oy vey, Lev. sorry to hear your shop burned down”
    “Shhh Hymie, that’s next veek”.

  5. Something tells me there’s a large element of tax planning in this move. Any tax causes a distortion, but the combination of capital gains, directors’ allowances and IHT is particularly complex.

  6. @Henry Crun
    Sorry, the connection is too abstruse for my simple brian, but it’s a very funny joke: is laughing at it enough to get cancelled these days?

    And a very true point despite the jest: as we emerge from the teat of government support, many businesses will discover they are zombies, and a good fire is the traditional outcome.

    It’s another strange correlation: how economic stress causes dreadful lapses in electrical wiring and the storage of solvents and fuels. Quite a mystery. Perhaps the sage of Ely, the ivy-covered Professor Potato Head could get a grant to investigate it?

  7. The Pedant-General

    ” last year had annual sales of £510m. ”

    Wow. A boring ordinary engineering company that makes actual things you can drop on your foot and it has a REVENUE multiple of 10x? Soemthing well fishy. I’d short at the current price.

  8. A chap I know, much younger than me, has recently become a CEO. He reports (i) it’s awfully stressy, but (ii) it’s so invigorating that he now can’t imagine doing a different job.

    I suspect that over the years effect (ii) will fade away, and that effect (i) might transform into getting fed up with the endless buggeration.

    For those two chaps to keep it up for 50 years: hats off!

  9. I’ve been a Renishaw shareholder for years and these chaps deserve every penny of their “windfall”. They’ve done an exceedingly good job of developing new products, selling on quality rather than price and then re-investing the profits in R&D so the cycle repeats.

    The company would be a good example for MBA students to study, except the conclusion would be that it’s better to have a company run by engineers than by MBA graduates.

  10. The Pedant-General

    Noel C

    As a shareholder looking at a PE ratio of 50 (5bn valuation on pretax profit of 100m) but I’d be thinking pretty hard about taking some profit now…

    I’d be jolly happy about taking some profit now, but I’d be thinking about doing it.

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