Wednesday, 18 July 2012

Toby Marchant exits Paperlinx

Yesterday, Paperlinx announced the resignation of its chief executive, Toby Marchant (did he jump or was he pushed?) For those that don't know, he's been the guy at the head of Australian based Paperlinx. If you're wondering what that's got to do with this blog and you - it's because they own Robert Horne, Howard Smith and The Paper Co -names of UK paper merchants which many of you will be familiar with. 
Toby Marchant started as a paper merchant in the UK, eventually becoming Managing Director of the loss making Modo Merchants (now closed down). He jumped ship at the end of the 90's to the profitable Robert Horne Group and after overseeing years of declining profitability, he was promoted (!) through the ranks of  the parent company, Paperlinx, ending up as CEO (...nice work!)

For Paperlinx, which a decade ago was worth more than (Aus)$2 Billion (-yes, you did read that correctly), there are many issues - it now has a market capitalisation of only (Aus)$25 Million (Source: Sydney Morning Herald) - having recently sold off operations in South Africa, Italy and Eastern Europe, it is contending with hostile shareholders trying to reverse several years of corporate losses and it's bankers. Suppliers appear to be withdrawing products; Zanders have withdrawn Chromolux, ArjoWiggins have stopped supplying their recycled ranges, Cordenons have withdrawn their Stardream range and suppliers are struggling to get credit insurance cover. Other executives including Malcolm Lane-Ley, Managing Director of Howard Smith and The PaperCo is also leaving at the end of this month.

Robert Horne Paper was the revered company in the UK paper industry, as a supplier, customer and employer. I was fortunate enough to meet Kenneth Horne in 1995 and I even bought the book he published "Somebody said that it couldn't be done" which documented his three decades at the helm of the company founded by his grandfather - and make no mistake, it was a great company. It will certainly be sad for the UK industry if the end result of Paperlinx involvement means that this and the sister companies simply disappear.

Hundreds (if not thousands) of jobs have been lost in the UK paper industry in recent years. I hope that Toby Marchant, who is set to receive a "banker style" golden goodbye of one year's salary (after only 2 years as CEO) will reflect on this whilst lying on his sun lounger!
Posted by Justin Hobson 18.07.2012
28th September Update
Printweek reports today that Marchant ended his employment with Paperlinx on a salary of £363,545 after he took a 15% voluntary pay cut on 1 April (April Fools day!) this year. Tobes gets 12 months salary as part of his "mutual" decision to leave the company. On top of this, he was given £26,000 in accrued entitlements to bonuses for completed asset sales in 2011/2012 and £21,648 to compensate for untaken annual leave. I'm sure everyone in Northampton will be pleased to know that he'll be comfortably off in his retirement.

10th October 2012 - Important update
A link to an Australian website run by a Paperlinx shareholder has been REMOVED from this post, following a legal notice sent to me by a solicitor acting for Paperlinx Limited.
I have written about this on the following post:
As with everything written on this blog, the views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to Fenner Paper Company Ltd!

1 comment:

Thanks for your comment! If I like it, I'll add it on. Cheers J