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13 March 2004
The Herald
Cheese-maker ponders stock market flotation

Glasgow cheese-maker A McLelland & Son is considering floating on the London Stock Exchange, according to industry and stockbroking sources.

A senior player within the food industry says he has heard that the 154-year-old family firm, which is behind the hugely-popular Seriously Strong Cheddar brand and coined the advertising slogan 'safesexdangerouscheese' is weighing up a listing although he was uncertain of timescale.

The source said: 'I have heard they (McLelland) have been in the City talking to advisers, but I don't know whether they are planning to float in one month, two months, a year, or two years.

'I guess it will come down to whether the family is happy to sell down some of their shares to City investors.'

Another source within the Scottish stockbroking community said: 'There's been a lot of talk about it in the pubs.'

It is believed that the company is currently looking at how to drive the business forward after a period of rapid expansion which has seen the company jump from a 28m turnover in 1995 to 136m in 2003. Flotation may still be one of several options at this stage.

Founded by Archibald McLelland in 1849 as a grocer and grain merchant, it is now the UK's third-largest cheese company with around 170 employees and brands such as McLelland Mature, Scottish Pride butter and cheese, Galloway, Burns Truckles, and Orkney.

It gained UK-wide recognition in October when it picked up the top gong in the consumer products category of the UK entrepreneur awards.

A spokesman for the company said: 'We (McLelland) are constantly revising our business and looking at our strategy to ensure that we maximise the potential within this company.

'We remain alive to opportunities but have no immediate plans to go for a stock exchange listing.'

The spokesman said the company had not 'contracted' advisers.

However, when asked if he could rule out flotation within the next year, he replied: 'It would be imprudent to rule out any means to achieve growth.'

The company is currently run by joint managing directors Alastair and Douglas Irvine, the fifth generation of the family to head up the firm.

It achieved notoriety in 2001 when several of its ads were banned by Hello magazine for being too risque. It has most recently featured a criminal mastermind mouse which steals cheese in elaborate heists in its television adverts.

The firm recently invested 15m in a state-of-the-art packaging and processing plant in Stranraer to boost productivity. It also acquired a controlling stake in Aeron Valley cheese in South Wales for an undisclosed sum, taking the group's annual capacity from 35,000 to 45,000 tonnes. It is also branching out into new markets and products such as Seriously Strong pizza.

Stuart Light, senior investment director at BWD Rensburg, said: 'One reason for floating would be to recoup some of the expenditure which has been made over the last couple of years as the company has spent a lot of money on plant.

'It is a family-owned business which has been run by its chairman (Hugh Irvine) for the last 24 years and his two sons and it may be they now feel they would be less constrained if the company was on the market.

'You could liken it to Robert Wiseman Dairies - when the brothers took charge they launched the company on to the market and it has gone on to be one of Scotland's most successful companies.'

CHRISTINE FERGUSON and KARL WEST



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