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(Sharecast News) - Science Group announced on Friday that it has further increased its stake in Ricardo to 19.09%, intensifying pressure on the engineering consultancy's board following a series of scathing critiques of its governance and strategic decisions.
The enlarged holding, equivalent to 11.88 million shares, was acquired at an average cost of 235p per share, and made Science Group Ricardo's second largest shareholder.
Its move followed a sharply worded statement issued by Science Group earlier in the week, in which it expressed deep concern over Ricardo's financial performance, governance standards, and recent strategic actions.
In that statement, Science Group accused Ricardo's board of failing to deliver on previously stated profit targets and allowing operational inefficiencies, including poor cost control and weak cash conversion, to erode shareholder value.
Science Group, which noted that it had consistently outperformed Ricardo on key financial metrics, argued that the latter's underperformance could not be blamed solely on external market conditions.
It highlighted its own robust margins, strong earnings growth, and disciplined capital management as evidence that Ricardo's challenges stem from internal failings.
The group also renewed criticism of executive remuneration at Ricardo, calling it disproportionate given the company's declining market value.
It pointed to the board's minimal shareholdings as further evidence of misalignment with shareholder interests and reiterated its demand that no further acquisitions or disposals occur without shareholder approval.
The call came amid speculation that Ricardo may be preparing to sell its performance products division.
Particularly contentious was Ricardo's recent Australian acquisition, completed just weeks before a profit warning in January.
Science Group described the timing as reckless and symptomatic of deeper governance problems, asserting that a fundamental change in oversight was required.
It also dismissed Ricardo's objections to its own board nomination efforts, saying its involvement would strengthen - not dominate - corporate governance.
Despite Ricardo's stated intention to publish a new strategic update in mid-April, Science Group questioned the board's credibility and execution track record, concluding that a leadership change at the top was necessary.
Ricardo was yet to issue a substantive response to the issues raised across Science Group's announcements.
Reporting by Josh White for Sharecast.com.