Harry Tincknell, son of Connaught’s former executive chairman, benefited from series of sponsorship deals
At least five major suppliers to Connaught, the beleaguered social housing maintenance group, have helped bankroll the promising motor racing career of Harry Tincknell, son of the company’s recently departed executive chairman, through a series of sponsorship deals.
Prominent among Tincknell’s sponsorship partners are Plumbing Trade Services, known as PTS, which is part of stock market listed BSS Group. Also placing their brand name on the young driver’s shirts are building merchant Jewson, equipment rental firm Speedy Hire and IT firms Azzurri and Annodata.
All five businesses have significant ties with troubled Connaught, the business Harry’s father, Mark Tincknell, spent 28 years building from a small regional operator in Exeter into one of Britain’s largest social housing maintenance groups.
However a shock profits warning in late June led to panic among a range of Connaught’s stakeholders, including investors, suppliers and lenders. The company’s share price has dropped 95% amid concerns about the group’s aggressive accounting policies. Connaught last month announced Tincknell and finance director Stephen Hill were leaving; the departure of chief executive Mark Davies had been announced in January.
Between them, the three executives each made multimillion-pound fortunes from the sale of stakes in the FTSE 250 company before the share price collapsed. Between April 2008 and last October, Tincknell, Davies and Hill took home windfalls of £10.7m, £5.5m and £2m respectively. Tincknell this year reinvested £1.6m, which has shrunk in value.
The former Connaught boss is believed to have used his contacts book as well as mortgaging a home he owns with his wife to help secure sponsorship deals to further his son’s racing career.
Harry Tincknell, who turns 19 next month and lives with his parents, is a promising driver and claimed his second Formula Renault UK Championship victory last weekend at Snetterton racetrack in Norfolk.
Several suppliers to Connaught contacted by the Guardian would not speak on the record but all privately insisted decisions to sponsor Harry Tincknell had been taken for commercial reasons. Some pointed out they offered similar sponsorship deals throughout motor sport.
Nicola Lidgett, head of marketing for Azzurri Communications, said: “For me it is absolutely a valuable exercise.” The business struck a deal to outsource Connaught’s entire fixed and mobile communications in October 2008.
In 2007, Connaught negotiated a deal to use Jewson as preferred supplier while Speedy Hire announced in March this year that it had entered into a new five-year strategic supply agreement with Connaught. Meanwhile, Annodata has outsourced Connaught’s printer services operations.
A month after issuing its first profits warning in June – at which point the company had assured investors it had substantial headroom in its bank borrowing facilities – Connaught released a further trading update informing investors the business now had “an urgent requirement for additional funds to meet the current and ongoing needs of the business”.
It said the working capital crisis had been largely triggered by suppliers and subcontractors – many of them previously eager to secure business with fast-growing Connaught – tightening the payment terms demanded of the crisis-stricken group. The business remains in crisis talks with lenders, who may end up being forced to take ownership of a portion of the business. A further profits warning last week made clear Connaught expected to make a “material” operating loss for its current financial year.
On the same day, Connaught’s largest and most loyal shareholder, Breeden European, run by former US securities and exchange commission chairman Richard Breeden, sold more than half his investment, as did a second major shareholder, Norwegian government pension fund Norges Bank.