Page 6 - Stakis Consolidated Teaching Note

In February 1991 Sir Lewis Robertson was appointed
Chairman of the Group replacing Sir Reo who became

President. He was selected on the basis of his track record

as a company rescuer and immediately set about turning
the situation around. Share price had fallen from 94 pence

to around 36 pence. Perhaps his most difficult task was the

removal of Andros Stakis after the announced loss of £45.1

million for the six months to March 1991. This decision
was not forced from outside. Pressure had been building

at board level within Stakis.

By October 1991 evidence of internal unrest manifested
itself when four directors attempted to organise a buy-out

of the Leisure division. It failed and they were

subsequently sacked.

In December 1991 David Michels was appointed Chief

Executive. His policy was to re-introduce basic principles of

margin and cost control. He followed up on the policy of
reduction of staffing levels initiated by Sir Lewis and sold

off everything that was not nailed down. This included

disposal of everything except the core businesses of

Hotels and Casinos. Staff morale was low and had to be
built up. Michels was perceived by the city as the agent of

change most likely to turn the fortunes of the company

around. By February 1994 it was announced that pre tax
profits had risen to £10.4 million.