Mike Norris, the CEO of Reece Cycles PLC, founded the business that grew into Reece PLC, which had interests in door panels and ceramics as well as bicycles. He bought back the bicycle part of the business on May 5th 2000 and resigned as MD of Reece plc. This was alluded to in the Investors Chronicle report but not made wholly clear.
The IC piece is below and states that the cycle part of Reece plc pre-buyout was a loss maker as fierce competition had more than halved gross margins.
This summers poor weather will not have helped the new company.
Today Mike Norris told BikeBiz that the weather was playing havoc with the whole of the bike trade:
May, June and July were really horrible for us, and for everybody else in the bike trade. However, August picked up a lot.
TEXT AND GRAPHICS FROM INVESTORS CHRONICLE
In last years push to rid itself of two of its three businesses, Reece only managed to sell a lossmaking cycle import business to its former managing director and his wife for about £860,000 with £350,000 deferred. At an operating level before exceptional costs, cycles lost £403,000 (profit £87,000) last year as fierce competition more than halved gross margins. It continued to trade at "a substantial loss" until it was sold in May, so dont expect particularly good 2000 results. Equally disappointing was the performance of the ceramics business. Its losses rose from £185,000 to £527,000 as demand fell sharply. The one profitable business, making door panels, reported profits down from £220,000 to £63,000. It invoices sales to its main export market, France, in francs and so was hit by a strong pound.
Exceptional costs totalled £504,000 (£232,000) and included cycle and ceramic stock write-offs, fixed assets write-downs across the board, a trade debtors write-off in cycles and onerous lease costs in door panels. Reece is searching for a "significant" acquisition and the sooner it finds one the better.