The management of Sprue Aegis (LSE: SPRP) have proven to the market that they are more interested in diluting shareholders and lining their own pockets than keeping their eye on the ball.
If you outsource manufacturing to a dodgy geezers in China then expect that your end products will just be shocking.
Just look at the placings over the last 12 months:
All this issuance of equity to fund the exercise of employee share options.
It is outrageous given the profit warning we’ve had from this ill-managed company this week in which it was announced that an extra 5.5 million quid will to be set aside for warranty provision arising from a manufacturing fault:
Sprue (AIM: SPRP), one of Europe’s leading home safety products suppliers, announces that the Company has recently identified an issue in certain batteries supplied by a third party supplier that may cause a premature low battery warning chirp in certain of its smoke alarm models sold in the UK and in Continental Europe… Consequently, further to the Company’s trading update released on 20 January 2016, the Board now expects the Company’s operating profit* for the year ended 31 December 2015 to be approximately £7.3m compared to the previously announced expected operating profit* of £12.1m.
I’m presuming here that Sprue’s third party supplier is DTL (as we are not told in the profit warning RNS) with whom Sprue recently updated their supply terms so that it increases the costs of it’s products.
Executives need to be paid appropriately and proportionately and with that in mind I draw your attention to Sprue’s ‘Long Term Incentive Plan’ released to the public on 5 June 2016:
Shareholders ought to now focus their attention on whether or not management will continue to issue equity to take their mistresses away for the weekend.
I have emailed Sprue for clarification on this matter and await their reply.