Copyright: David Lawson 1996
Sir John might have been amused. Sir Nigel most definitely would not. Bombs have rained on Slough with sickening regularity over the last few weeks, as if in long-delayed response to Sir John Betjeman's demand during the last war. But they have been aimed at the eponymous company headed by Sir Nigel Mobbs rather than the ugly Thames Valley town so disliked by the late poet laureate.
Slough Estates has confirmed a wonderful tendency for British management to shoot itself in both feet - and then wonder why people complain about the mess. British Gas makes a lot of money - but customers notice only that directors seem to be getting rather a lot of it. The Woolwich board feels it did savers a good turn by dumping its managing director - despite the likelihood that the building society will now be gobbled up by a predator.
Slough is trumpeting a management revolution long demanded by the City. Sir Nigel has separated executive roles as chairman and chief executive, as demanded by the Cadbury Committee on corporate governance. An heir-apparent has also been announced in former joint managing director Derek Wilson, who has taken over as chief executive.
Instead of welcoming the move, however, City analysts are concentrating on the fact that this leaves no role for Roger Carey, the other joint chief, who has master-minded development for the last decade. He is leaving just at a time when Slough is starting a £175m development programme.
Just as fat profits by British Gas and the Woolwich have been over-shadowed by the scandals, so were a buoyant set of Slough figures showing pre-tax profits up 10.5% to almost £71m last year.
'The shares are now among the more attractive in the sector majors on discount and yield criteria,' said John Atkins and Ray Jones at UBS Global research, who are advising clients to hang onto their holdings. But they go on to point out that the loss of a 'highly respected development director' at a time when the groups was dependent on its future building programme ' added nothing to stock market credibility'.
And here is the real nub of the matter. The City has used the management controversy to air much wider doubts. Firstly, analysts don't like industrial property. 'It is dull, boring and holds little promise of growth,' says one. That disenchantment spills into a similarly poor response to Brixton Estate, the sector's other industrial giant, which announced an 8% boost in pre-tax profits to more than £35m last year.
Alan Carter and David Nighy at BZW give Brixton a back-handed compliment for surviving three 'difficult' years of high lease expiries by judging it a preferred stock 'for those seeking exposure to industrial property'. But they still rate the shares an overall 'sell'.
In other words, no-one should be holding industrial property. It is an argument hard to counter when the IPD Index shows industrial rents fell more than 1% last year and overall returns spluttered along at 2.7%. Latest government figures last week also showed growth rates in manufacturing and industrial production at zero - the lowest for more than three years.
Robin White of NatWest Securities gives Brixton brownie points for re-letting 93,000m2 (more than 1m sq ft) of space and BZW feels the 9.5% running yield accurately reflects the market and gives limited downside. 'But they are running to stand still,' he says.
Slough is seen as less realistic by some analysts with its 8.2% yield, suggesting there is some downvaluation possible. The core problem is that few - if any - analysts see prospects for future rental growth in either company. 'It is not a sector I would want to be in and both managements should be considering whether to tell the City how they are planning to get out,' says Andrew Walker of Paribas.
No sign of that from either company, however. Brixton has spent almost £200m on new investments since its 1993 rights issue but industrial and warehousing, now worth more than £500m, remain the core of the portfolio, according to the annual operating review. And the £400m of offices inspire little more confidence, as they are tilted towards London's Holborn, where demand is negligible.
Slough is moving into new areas through its development programme - such as the 55,800m2 Buchanan Galleries in Glasgow. It also professes a bright future of rising demand and a 'real opportunity' to capitalise on a 'strong financial position and portfolio of prime business locations'.
But Walker is more concerned about the money that existing portfolios at both Slough and Brixton could soak up over the years. Not that analysts know exactly what what hides behind the global figures. And that opens another can of worms.
Slough lies in the same shadow which blighted MEPC for years: it has not brown-nosed the City. That is understandable considering the personality of Sir Nigel Mobbs, a powerful chief executive confident of a seat at the table of most top politicians and investment giants. But it leaves a cloud over analysts.
Robert Fowlds and Alec Pelmore of Kleinwort Benson were happy to say Slough has 'sorted out the main problem areas' over the last three years. But they still believe the company has a 'communication problem'.
Most analysts are reserving judgement over whether Slough's management reorganisation will raise its credibility and narrow the gap which sees the shares standing at 20% discount to NAV compared with a 12% sector average. There is no reason why the shares should be so lowly-rated, says White - one reason why he rates them as a hold. But if they are not re-rated after the latest changes, pressure could build for further board shakeups.