Elektron AGM update by Armshare.

Armshare has given an update on Elektron following their AGM and made EKT Armshare meeting of the week.

I attended the AGM myself and the company indicated they were to push through price increases on various products to increase margins and thus profitability going forward. There was a new potential shareholder attending the AGM who indicated Elektron managemt had proved their abilitly in relation to obtaining value through their acquistions.

The Armshare update is as follows....

COMPANY MEETINGSi) Attendance at the AGM on 28th July 2008The key purpose of attending was to meet the recently joined NED, Keith Roy (KR), who retired in July 2008 from being a divisional CEO of fully listed Halma plc (for further details, see June 2008 above). Halma has built a reputation over the last 30 years as an engineering group addressing niche markets with a business model which generates very attractive margins - 19% in 2007/8 - by contrast, Elektron's adjusted operating margin for 2007/8 was 6%. KR was attracted to Elektron because a) it owned Bulgin Components and Sifam, both of which were known to him from his days as a practising engineer, b) the opportunity to significantly improve operating margins through applying the Halma value creation principles to both existing divisions as well as to future acquisitions, and c) he could already see in place certain key managers who will respond positively to the application of those principles.The 5 principles which underlie Halma's approach to creating shareholder value are:a) operate in specialised global markets offering long-term growth underpinned by robust growth drivers;b) build businesses which lead specialised global markets through innovative products differentiated on performance and quality rather than price alone;c) recruit and develop top quality boards to lead the businesses and nurture an entrepreneurial culture within a framework of rigorous financial discipline;d) acquire companies and intellectual assets that extend existing activities, enhance entrepreneurial culture, fit into a decentralised operating structure and meet the group's demanding financial performance expectations;e) achieve a high Return on Capital Employed to generate cash efficiently and to fund organic growth, closely targeted acquisitions and sustained dividend growth.With the above background, RK will play a key role in helping the Elektron board select a CEO with the ability to apply the above principles successfully - doing so will dramatically lift the operating margin over the next 2 to 3 years, which with the present level of sales of £35 million (let alone any acquisitions which may be made) will have a significant impact on profit in relation to the market cap of £9.8 million at 4th August 2008.