Pre-Annual General Meeting Information • Apr 17, 2023
Pre-Annual General Meeting Information
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(Incorporated and registered in England and Wales with Company number 00224271)
| Registered Office |
|---|
| Park Farm Technology Centre |
| Akeman Street |
| Kidlington |
| Oxon |
| OX5 3JQ |
17 April 2023
To Shareholders of Highcroft Investments PLC (the "company")
Dear Sir or Madam
I am pleased to be writing to you with the details of the ninety fifth annual general meeting of the company, which will be held at the offices of Singer Capital Markets, 1 Bartholomew Lane, London, EC2N 2AX on Wednesday 17 May 2023 at 12.00 noon (the "AGM"). The formal notice of the AGM is set out on page 3 of this document (the "notice"). The explanatory notes for the business to be transacted are set out on pages 4 to 7 of this document ("Explanatory Notes").
This document should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2022, which is available on our website www.highcroftplc.com and is being posted to shareholders who have opted not to receive electronic documentation.
Shareholders are welcome to attend the AGM in person this year or can exercise their right to vote by submitting their vote electronically or by submission of a proxy form, in accordance with the instructions set out below.
To enable us to make appropriate arrangements, if you intend to attend the AGM in person, please pre-register your attendance by email at [email protected]. In line with the 2022 AGM, no lunch will be provided to shareholders attending the AGM.
The company may be required to change the arrangements for the AGM at short notice. In the event of this change, we will publish any updates in relation to our AGM on our website as and when necessary.
Please check the company's website www.highcroftplc.com in advance of the AGM in case there are any changes made to the arrangements for the meeting.
The resolutions ("resolutions") to be proposed at the AGM cover our usual matters of business, as well as the proposal for the new directors' remuneration policy.
Further details on each of the resolutions, including further explanation of the new directors' remuneration policy, are set out in the Explanatory Notes on pages 4 to 7.
Shareholder votes are important to us and all shareholders are encouraged to vote ahead of the AGM. If you would like to vote on the resolutions but cannot come to the AGM, you can appoint a proxy to exercise all or any of your rights to attend, vote and speak at the AGM. If you are to appoint a proxy, you may appoint the chair of the meeting as your proxy.
Should you wish to raise any questions ahead of the AGM please do so via email to the company secretary at [email protected].
The results of voting will be announced to the London Stock Exchange and on our website as soon as practicable after completion of the AGM.
Shareholders should submit their proxy vote by 12.00 noon on Monday 15 May 2023 via www.signalshares.com. If you need help with voting online, or require a paper proxy form, please contact our Registrar, Link Group by email at [email protected], or you may call Link on 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Link Group are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales. Submission of a proxy vote shall not preclude a member from attending and voting in person at the meeting in respect of which the proxy is appointed or at any adjournment thereof.
The board considers that the resolutions are in the best interests of the company and its shareholders as a whole. Accordingly, the board unanimously recommends that you VOTE IN FAVOUR OF THE RESOLUTIONS at the AGM.
The directors, whose personal beneficial shareholdings together with those of their connected persons amount, in aggregate, to 24,181 ordinary shares representing approximately 0.46 per cent of the current issued share capital of the company, unanimously intend to VOTE IN FAVOUR OF THE RESOLUTIONS at the AGM.
Yours faithfully
Charles Butler Chairman
NOTICE OF ANNUAL GENERAL MEETING
(Incorporated and registered in England and Wales with Company number 00224271)
Notice is hereby given that the ninety fifth Annual General Meeting ("AGM") of Highcroft Investments PLC (the "company") will be held at the offices of Singer Capital Markets, 1 Bartholomew Lane, London, EC2N 2AX at 12.00 noon on Wednesday 17 May 2023, to consider and, if thought fit, to pass the following resolutions which will be proposed, in the case of resolutions 1 to 11, as ordinary resolutions, and in the case of resolution 12, as a special resolution:
To receive and consider the annual report and accounts of the company for the year ended 31 December 2022.
To approve a final property income distribution of 33 pence per share on the ordinary shares of the company for the year ended 31 December 2022. If approved, this distribution will be paid on 2 June 2023 to shareholders on the register of members at the close of business on 21 April 2023.
To approve, on an advisory only basis, the directors' remuneration report, excluding the part containing the directors' remuneration policy, contained in the annual report for the year ended 31 December 2022, in accordance with section 439 of the Companies Act 2006.
To approve the directors' remuneration policy ("directors' remuneration policy"), as included on pages 6 and 7 of this notice of meeting and as included on pages 74 to 75 in the annual report for the year ended 31 December 2022, in accordance with section 439 of the Companies Act 2006.
To re-elect Charles Butler as a director of the company.
To re-elect Simon Costa as a director of the company
To re-elect Roberta Miles as a director of the company.
To elect Paul Leaf-Wright as a director of the company.
To elect David Warlow as a director of the company.
To re-appoint Mazars LLP as auditor of the company (the "auditor") to hold office from the conclusion of the AGM to the conclusion of the next annual general meeting at which accounts are laid before shareholders.
To authorise the board to determine and fix the remuneration of the auditor for the ensuing year.
That a General Meeting of the company (other than an Annual General Meeting) may be called on not less than 14 days' notice.
By Order of the board
Company secretary
17 April 2023
Registered Office Park Farm Technology Centre Akeman Street Kidlington Oxon OX5 3JQ
The notes on the following pages explain the proposed resolutions.
Resolution 1 – Annual accounts of the Company for the year ended 31 December 2022 - (the "Annual Report")
For each financial year, the directors must present a directors' report, audited accounts and an independent auditor's report on the financial statements to shareholders at a general meeting. The directors believe that the 2022 Annual Report, taken as a whole, is fair, balanced and understandable.
The directors recommend a final property income distribution of 33 pence per share on the ordinary shares of the company for the year ended 31 December 2022. If approved, this will be paid on 2 June 2023 to those shareholders on the register of members of the company as at the close of business on 21 April 2023.
This is a resolution to approve, on an advisory only basis, the directors' remuneration report (the "directors' remuneration report"), excluding the part containing the directors' remuneration policy, contained in the Annual Report, in accordance with section 439 of the Companies Act 2006. The resolution is an advisory resolution and accordingly the entitlement of a director to remuneration is not made conditional on this resolution being passed.
The current remuneration policy was approved by shareholders at the 2022 AGM and was unchanged from the policy approved at the 2019 AGM. As explained in the remuneration committee report on pages 74 to 75 in the annual report, the committee reconsidered the existing remuneration policy and determined that it is overly complex for an organisation of Highcroft's size and does not sufficiently incentivise the executive directors. The committee and board have therefore approved a new remuneration policy designed to continue to support strategy and to promote sustainable success whilst incentivising the executives in a clear and less complex manner. The committee consulted major shareholders on renewal of the policy and no concerns were raised. The revised policy is on pages 6 to 7 of this notice of meeting.
In accordance with Provision 18 of the Code all directors in office at the time of the AGM will offer themselves for election and re-election. Paul Leaf-Wright and David Warlow will be standing for election having been appointed by the by the Board during the year. The other directors will be standing for re-election. Details of the roles, skills and experience of the directors can be found on pages 58 to 59 of the Annual Report.
Following the annual board evaluation exercise conducted during the year, the board considers that each of the directors proposed for election and re-election continues to make an effective and valuable contribution and demonstrates commitment to their role. There have been no absences from board or committee meetings. The board considers the proposals to elect the new directors to the board, together with the re-election of other directors to be in the best interest of the shareholders. Accordingly, the board unanimously recommends the election or re-election of each of the directors.
Assuming resolutions 5 to 9 are passed, there will be one chairman, who was independent on appointment, two executive directors, one independent non-executive director and one non-independent non-executive director.
Charles Butler was appointed to the board as an independent non-executive director and chairman in January 2018. Charles is currently a non-executive chairman of Best of the Best plc, an AIM listed company providing online competitions, a non-executive director of Essensys plc, a global provider of SaaS platforms and on-demand cloud services to the flexible workspace industry and a director of Belerion Capital Group Limited, an investment advisory firm specialising in e-commerce and technology investing. Charles is a chartered accountant who until January 2018 was the CEO of Market Tech Holdings Plc where he transformed a small group of central London real estate assets into a profitable, listed company with £1.3bn of real estate assets. With a successful track record in running public companies, M&A, raising equity and debt for expansion, Charles is well positioned to help the company navigate its next phase of growth. There are no relationships, transactions or arrangement to be disclosed pursuant to LR 13.8 17R(1) in relation to Charles Butler.
Simon Costa was appointed to the board as a non-executive director and senior independent director in May 2015. He is currently University Treasurer at the Royal Agricultural University, Cirencester, where his remit includes financial strategy and balance sheet management. Until recently, he was the finance director there, where he oversaw all the financial and related operations of the university. Simon was formerly the senior bursar of a college of the University of Oxford. He was responsible for overseeing the management of the endowment, and the finance and estates functions, and he served on all the college's core committees.
Prior to that he was an investment banker specialising in global M&A activities, and then for nine years he ran his own property company. In these roles, he advised US and UK public and private corporations on finance, operations, and strategy, as well as owning and managing a modest property portfolio. Simon's breadth of experience provides the board with a range of market knowledge and skills, which are particularly relevant to a company in Highcroft's position.
Simon is chairman of the audit and remuneration committees and a member of the nomination committee. There are no relationships, transactions or arrangement to be disclosed pursuant to LR 13.8.17R(1) in relation to Simon Costa.
Both of the independent non-executive directors are highly experienced and have a good knowledge of listed companies. In view of their career experience and skill-set the board considers that they each bring valuable skills to the board and provide an objective perspective. The effectiveness of each non-executive director was considered at a board meeting on 27 March 2023 and the board confirms that both of the independent non-executive directors standing for election are effective.
Both on their respective appointments, as part of the selection process, and at a board meeting on 27 March 2023, the board considered the independence criteria set out in provision 10 of the Code and acknowledged that Charles Butler and Simon Costa were independent by reference to the criteria in the Code. Additionally, at the same board meeting, the board considered the information provided above in relation to the disclosures required by LR 13.8.17R and the biographies of the directors in the Annual Report.
In accordance with the rules from the Financial Conduct Authority (the "FCA") which provide protections for the minority shareholders of a premium listed company in which there is a "controlling shareholder" (defined by the FCA as "any person who exercises or controls, on their own or together with any other person with whom they are acting in concert, 30% or more of the votes able to be cast on all or substantially all matters at general meetings of the company"), the election or re-election by the shareholders of an independent nonexecutive director must be approved by: (i) all the shareholders of the company by ordinary resolution and (ii) a simple majority of those shareholders who are not controlling shareholders (the "independent shareholders").
Independent shareholder approval for resolution 5 proposing the re-election of Charles Butler and resolution 6 proposing the re-election of Simon Costa will be sought by discounting from the result of the vote on resolutions 5 and 6 the votes of those shareholders who are identified as controlling shareholders of the company as at 16 May 2023. The shareholdings of Kingerlee Holdings Limited and its subsidiaries together with their connected parties and associates forming the Kingerlee concert party, as at 11 April 2023, held 2,127,382 ordinary shares, representing 40.86% of the company's issued share capital.
The company will, on announcing the results of the AGM announce, in respect of Resolution 5 and Resolution 6, the result of both the vote of the company's shareholders and the vote of the independent shareholders.
If independent shareholder approval is not given for resolution 5 and/or resolution 6, the company intends that Charles Butler's and/or Simon Costa's appointments (as applicable) will continue for 120 days from the date of the original vote, unless a further ordinary resolution for re-election is passed. If a further ordinary resolution to approve the re-election of Charles Butler and/or Simon Costa (as applicable) is defeated, his appointment will cease on that resolution being defeated.
These resolutions propose the re-appointment of Mazars LLP as auditor of the company to hold office from the conclusion of the AGM to the conclusion of the next annual general meeting at which accounts are laid before the company and following normal practice to authorise the board to fix the remuneration of the auditor for the ensuing year.
Resolution 12 will be proposed as a special resolution:
Resolution 12 seeks to allow the company to retain a 14-day notice period for company meetings, other than annual general meetings.
Changes made to the Companies Act 2006 by The Companies (Shareholders' Rights) Regulations 2009 increase the notice required for general meetings of the company to 21 days, unless the company has obtained shareholder approval for the holding of general meetings on 14 clear days' notice by passing an appropriate resolution at its most recent annual general meeting and offers the facility for shareholders to vote by electronic means accessible to all shareholders. Passing resolution 12 will mean that the company can continue to call a meeting other than an annual general meeting on 14 clear days' notice, provided that it offers the facility for shareholders to vote by electronic means at any such meeting. The company will continue to satisfy the requirement to provide a facility for shareholders to vote by electronic means by providing a facility, which is accessible to all shareholders, enabling shareholders to appoint a proxy by means of a website. The company intends to use this authority in limited circumstances for time-sensitive matters and where a shorter notice period would, in the board's opinion, be merited in the interests of shareholders as a whole.
The objective of the group's remuneration policy is to embed a clear, transparent remuneration structure, which helps drive the group's strategy by properly rewarding performance.
The group's remuneration policy is to be proposed to shareholders at the 2023 AGM under resolution 4. The board's policy is that the remuneration of all directors should reflect their expertise, and the particular value that they add to the group. In addition, the packages should be sufficient to attract and retain individuals of an appropriate calibre and capability and should reflect the duties and responsibilities of the directors and the value and amount of time committed to the group's affairs. The packages should continue to be aligned with our remuneration philosophy with at least one element of performance-related pay for each executive director.
| Element | Purpose | Link to strategy | Maximum | ||||
|---|---|---|---|---|---|---|---|
| Executive directors | |||||||
| Fixed Base salary |
Competitive remuneration base, benchmarked to the market reflecting role, responsibilities, skills and experience. |
To assist with recruitment and retention. | Not set. | ||||
| Pension | To provide the legal minimum post retirement benefits. |
To assist with recruitment and retention. | Not set. | ||||
| Benefits | Provide a competitive level of benefits. | To assist with recruitment and retention. | The maximum will be set at the cost of providing the benefits described. |
||||
| Variable – new policy with effect from 1 January 2023 | |||||||
| The Highcroft Bonus Plan |
To incentivise the executive directors to deliver both strong in-year financial and non-financial performance and sustained longer-term returns to shareholders. |
To assist with recruitment and retention. Annual cash awards capped at 10% of | distributions to shareholders. Up to 40% of base salary for the chief executive and 100% of base salary for the finance director. |
||||
| Shareholding - proposed new policy |
To support long-term commitment to the company and the alignment of executive director interests with those of shareholders. |
To align executive director interests with those of shareholders. |
None. | ||||
| Chairman and non-executive directors | |||||||
| Fees | Competitive remuneration benchmarked to the market, reflecting role, responsibilities, skills and experience. |
To assist with recruitment and retention. | Not set. |
The remuneration packages of all directors are reviewed annually and are listed in the table below, together with an explanation of who they apply to, their purpose, their link to our strategy, the mechanics of the operation of the element and any maximum amounts or performance criteria that apply. The chief executive's remuneration for 2023 is not directly comparable with the prior year, or that of the finance director, as some of the activities performed by the previous chief executive have been outsourced to Cube Asset Management Limited, including routine tenant and asset activities and the sourcing of potential new properties.
| Reviewed at least annually. Paid monthly via payroll. | N/A |
|---|---|
| There is an auto-enrolment compliance scheme in place. The group will pay either to this, or another personal pension scheme nominated by the director, at least the minimum legal level of company auto enrolment contribution. The group may pay a non-pensionable cash sum in lieu of pension contributions. |
N/A |
| There is no intention to introduce direct benefit provision for the executive directors at this time. However, the remuneration committee recognises the need to maintain suitable flexibility to ensure it is able to attract and retain directors. Accordingly, the remuneration committee expects to be able to pay a cash allowance in lieu of benefits such as private medical insurance and death in service life assurance as appropriate. |
N/A |
| Annual awards paid in cash. | Performance is measured over the financial year. 75% of the award is payable on the achievement of financial targets, with the balance being payable on the achievement of strategic targets. The remuneration committee is of the opinion that given the commercial sensitivity arising in relation to the detailed financial targets, disclosing precise targets in advance would not be in shareholder interests. Actual targets, performance achieved and awards made will be published at the end of the performance periods so shareholders can fully assess the basis for any payouts. The remuneration committee retains discretion in exceptional circumstances to change performance metrics and targets and the weightings attached to metrics part way through a performance year if there is a significant and material event that causes the remuneration committee to believe the original metrics, weightings and targets are no longer appropriate. Discretion may also be exercised in cases where the remuneration committee believe that the formulaic outcome is not a fair and accurate reflection of business performance. |
| Executives will be encouraged, but not required to build up a shareholding in the company. |
None. |
| Fees are reviewed annually taking into account, responsibilities, time | N/A |
|---|---|
| commitment and benchmark data for organisations of a similar size and | |
| complexity. Fees are paid monthly via the payroll and relevant expenses | |
| incurred are reimbursed. |
CREST members who wish to appoint a proxy or proxies through CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) of it by using the procedures described in the CREST manual. CREST personal members, sponsored CREST members and CREST members who have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action for them. In order for the proxy appointment or instruction to be valid it must be received by the company's agent (ID RA10) by the latest time for receipt of proxy appointments. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST proxy instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST manual concerning practical limitations of the CREST system and timings.
The company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
If you are not a member of the company but you have been nominated by a member of the company to enjoy information rights, you do not have a right to appoint any proxies under this "Appointment of proxies" section. Please read the section "Nominated persons" below.
Unless otherwise indicated on the Form of Proxy, CREST voting or any other electronic voting channel instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting.
Where you have appointed a proxy via the CREST system and would like to change your proxy instruction, please use the method set out in note 3 above.
If a member submits more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
Please note that the cut-off time for receipt of proxy appointments also applies in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
The revocation notice must be received by Link Group not less than 48 hours before the time appointed for the meeting.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
the company must publish on its website, a statement setting out any matter that such members propose to raise at the meeting relating to the audit of the company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the meeting.
Where the company is required to publish such a statement on its website:
A member wishing to request publication of such a statement on the company's website must send the request to the company using one of the following methods:
Whichever form of communication is chosen, the request must:
A copy of this notice of annual general meeting and other information required by section 311A of the 2006 Act can be found at www.highcroftplc.com.
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