The April 4th announcements were no surprise. A couple of months ago, the U.K.’s Daily Telegraph was so confident Ayling would take Andy Taylor’s place as head of the company that it ran the story alongside his picture on the front page of its business section.
The vibes between Sanctuary and Baker Tilly haven’t been good since the beleaguered music company’s former auditors insisted it wrote off £11.4 million that it was owed over the sale of its Cloud 9 TV production arm, which immediately turned a September 2004 year-end, pre-tax profit of £10.8 million into almost a million-pound loss.
“No guitars have been thrown around,” Taylor told The Times after the reportedly stormy meeting that followed Baker Tilly’s calculations.
Sanctuary corporate and investor relations director Philip Ranger wouldn’t comment on the switch beyond telling Pollstar, “KPMG is the proposed new auditor for the Group to be voted on at the AGM by shareholders, as is normal.”
At the time, there was some speculation that Baker Tilly was only retained as auditor because replacing the company amidst what became a public row would send the wrong message to investors.
In those heady days, which were only just more than a year ago, the investment community took the view that – putting the bad debt write-off aside – the group operating profit was more than £10 million and the shares stayed steady at around 44 pence.
The shareholders are expected to approve the switch from Baker Tilly to KPMG at Sanctuary’s AGM on April 28th.
On March 17th, Sanctuary announced that it has completed its £110 million refunding and “restored the group’s balance sheet.”
Ayling greeted his appointment by saying, “Sanctuary was successful over many years. The new board is determined that it should be successful again.”
He acknowledged that costs have been cut to repair the balance sheet but said, “the group has retained talented people,” although his appointment coincided with the news that more key personnel have departed the company’s London offices.
Mike Miller, who has been a senior member of Sanctuary’s management team for the last 20 years, is said to have quit to “pursue new opportunities.” James Wallace, Ayling’s Holidaybreak boardroom colleague, takes his place.
Wallace, who is a non-executive director of Holidaybreak as well as being chairman of metal treatment giant Bodycote, chairman of Manchester’s Lowry Centre and a non-exec director with NCC Group, has now joined the Sanctuary board and will head the company’s audit committee.
Ayling is Holidaybreak’s chairman and also is vice chairman of vacuum cleaner manufacturer Dyson.
Also gone from Sanctuary is former A&R chief John Williams, who is starting a new label within Universal Music at the company’s London offices at 364-366 Kensington High Street.
He can be reached at +44 (0) 207-471-5076 or at [email protected].
The Sanctuary board now comprises Ayling, Taylor (who remains as chief exec), Wallace, Tina Sharp (chairman of the remuneration committee), Paul Wallace (finance director) and non-executive director Johnny Greenall.
– John Gammon