How will Lockton spend its cash?
Lockton International tends to keep its own counsel, so its revelation this week that its private shareholders had stumped up £15m of extra cash was all the more unusual. But dig a little deeper and all becomes clear. Lockton did not choose to talk about this – it was bounced into it by a flurry of ever wilder market rumours and over informed journalists. With some market sources speculating that the broker had been in crunch talks with the FSA (which is firmly denies), Lockton was forced to pipe up.
The management firmly insists that this money is a vote of confidence and a means to expand the business more, and more quickly. And so now the market can decide. 603 staffers have left the business since Lockton acquired it in 2006, and sources within the broker claim that many of the negative rumours are fuelled by them. It is certainly none too popular, and has a noticeably high staff turnover.
But as a privately held business, it is not under any obligation to reveal how it spends its money and where. So claims that this cash is being used to paper over the cracks and finance rising interest on debt are unproveable. The management insists that it will be used to fund its international ambitions – and with offices set to open in Dubai and China, it has a head start. The market will be watching closely.
See story: Lockton handed 15m to expand worldwide