By Nigel Somerville | Wednesday 5 July 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Late last night at no-one-is-watching o’clock and then some (6.37 pm) Lakehouse(LAKE) released a statement which was signed off by PR firm Camarco. Perhaps it would have been better to insist on this occasion not to. I just hope that what follows will be addressed and corrected, for if it is not then woe betide the company.
In case nobody noticed, the residents of Grenfell had been complaining for months and months about the fire safety of the building both to the council and to the Kensington and Chelsea tenant management companies. Actually, the complaints go back years and involve major criticisms.
Meanwhile the former leader of the council has resigned, alongside his deputy.
I am lucky: I live in a relatively nice part of the world in my own home. I cannot imagine what the former tenants are feeling right now. But I do know that burying your head in the sand and blaming everyone else will act as a siren call in this environment. And being evasive and self-righteous will simply attract more attention.
Which brings us to Lakehouse and its statement last night. This seems to have been forced by a series of articles in the Evening Standard and a letter from Hackney council to Local Authority chief executives regarding a historical issue of alleged fraud, overcharging and defective work. The implication is that Lakehouse may have been at the centre of further issues at Grenfell, although the letter actually says otherwise (albeit only passingly).
The problems at Grenfell go back a long way, with inaction apparent by the council. The issue with the Lakehouse response is that is it continuing in the same way. It is not necessarily guilty, but the phrasing and terminology is just so awful that you almost wish it were.
In no particular order, here is what I found most unfavourable;
1) The RNS was released at 6.37pm. If that is supposed to inform the market then I am a banana.
2) The statement kicks off with Grenfell Tower but immediately launches into a self-satisfied drivel of self-congratulation before admitting that its subsidiary did the fire safety checks in January. The statement goes on that all was working fine in January of this year, so that’s alright then. In case nobody noticed, the building was destroyed by fire a few days ago.
3) The statement then refers to the specifications of the system, for which it was not responsible. So let’s get this right: if it was not working properly then not your fault? What is the point of checking a fire system if you don’t bother to check whether it will work?
4) While Lakehouse contends that all was well there are a few media articles which directly contradict Lakehouse on that point, with some residents (who did escape) notified by a bang on the door and not a fire alarm. It sounds as though the fire alarm may have been patchy but perhaps it was not. But the company surely shouldn’t claim innocence yet.
5) Currently we have not been required to provide any information to an inquiry… Yes, because it hasn’t even had the terms of reference set. The inclusion of that statement invites derision.
6) The press have queried why Lakehouse did not say anything after the Grenfell Fire. I guess this statement might be why…but no, there is a different excuse offered: we were contractually compliant and had informed the market, on 17 May 2016 and 24 January 2017 that we were performing works for Kensington and Chelsea. Right, so that stops you from saying anything about it? As for contractual compliance, well I guess we will see.
This is the sort of guff I would expect from council and ministerial offices when they don’t want to look. If it was designed to ameliorate then in the current climate they quite simply have got that wrong.
Grenfell Tower casts a shadow across everyone who has touched it, whether they were implicated or not. It simply is the case that the fire system was not good enough – if it were then surely more people would have escaped. For the company to say that the stuff was working when that is at least questionable is just silly – why not wait for the report?
The fatuous statement that it has not been required to provide information to an enquiry (which is not yet underway) is risible – let’s see how that statement stands in the fullness of time. So is the excuse for not saying anything – you knew you would be outed eventually, surely? If anything these statements almost imply guilt, not innocence.
The statement from Lakehouse is entirely consistent with the reasons for the anger is Kensington and Chelsea. As such it is no surprise to see the shares down 11.5% this morning at 36.5p last seen. Compare that to 49.5p just before the fire started (and it has been downhill the rest of the way since then).
Lakehouse has had its problems since coming to market, resulting in boardroom change and dropping to AIM. The latest controversy suggests there remains much to be done. At the very least one can say that those responsible for this release are the sort of people who give capitalism a bad name.
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