So long, farewell…

BEFORE too long, Clough Engineering may be just another corporate memory in Australia, which is a shame when it seems the engineering house was just starting to hit its straps.
So long, farewell… So long, farewell… So long, farewell… So long, farewell… So long, farewell…

 

Noel Dyson

The process that will clear the way for South African engineering house Murray & Roberts to mop up the shares it does not already own at $1.46 a share is well advanced.

All going well, Clough will disappear from the Australian Securities Exchange in December.

It will be a sad day for those who have watched the company go through the highs and lows of listed life, particularly because the company just seemed to be hitting its straps under the leadership of Kevin Gallagher.

At a time when a number of companies were going backwards, Clough announced a profit upgrade.

When other firms were bemoaning the rise of Asian fabrication, Clough entered into a joint venture with a yard in Asia that gave it access to that market.

Not bad for a company that started its life as a building company in 1919 then headed by John Clough.

It shifted its focus to become a civil and heavy engineering house in the 1950s.

Around this time Harold Clough took over the business and he would remain with it for several decades.

One of the company’s first heavy engineering jobs was the Narrows Bridge, which spanned the Swan River, linking South Perth with the main Perth CBD.

Ever the plain talker Clough was heard to remark: “If that bridge ever falls down, I’ll know why”

He then launched into quite an in-depth explanation of the ground conditions of that particular part of the Swan River bed.

That he could say it so freely and also with what was something of a trademark twinkle in the eye, highlighted the culture and spirit of the company – one of innovation and creativity.

Somewhere along the line it seemed to lose that.

Through the 2000s the lustre on the firm, which had carved a niche for itself in a number of sectors, started to fade.

It was probably highlighted by the sort of mishaps that befall a major engineering house.

In one case it was a drive system on a giant composter at a waste facility.

In another case it was a dispute over work it had done on an offshore oil and gas facility.

There had been suggestions that the contractor, which seemed to be at its best in the oil and gas industry, was going into too many different areas.

Also around this Murray & Roberts stepped in.

It had already taken a small stake in the engineering firm and moved to grow that in 2004 to 29.3% through a Clough placement and through the Clough family selling it 60 million shares.

The Murray & Roberts plan was to then grow to a 50.1% stake in the company using the 3% creep provision.

One of the problems facing Clough was that while it finished its first day as a listed company with its share price at 77c, it never reached much more than $1.03 until the takeover from Murray & Roberts started to take effect.

Part of this came from the fact that Clough had been a family company prior to its listing and the Clough family still held a huge stake in the company.

Murray & Roberts coming onto the register took out the Clough family stake but at the same time the firm’s fate was pretty much sealed.

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