RTC Group – A Case Study in Shareholder Activism

RTC faces two shareholder resolutions at its AGM on 27th May. 

Key Takeaways for Investors: 

• The Resolutions (10 and 11): to appointment two independent NEDs to provide oversight and separate the CEO/Chair roles. 

• The Financials: RTC is debt-free with a £3.9m cash pile, yet trades at a significant P/E discount to its peers. 

• The Activist Group: led by David Stredder (acting in a personal capacity, but he is also a director of ShareSoc), representing 24% of the register. 

• The Goal: to unlock an estimated 50% valuation gap through better governance and cost control. 

• The AGM will be held at The Derby Conference Centre, DE24 8UX on 27 May at 12 noon. Votes submitted by your platform/broker need to be submitted earlier if you are not attending in person. The timing depends on the platform but usually is at least 3 working days before the AGM. 

• I recommend shareholders vote FOR David Stredder’s resolutions 10 and 11, and AGAINST the re-election of Andy Pendlebury, the Remuneration Report and the waiving of pre-emption rights (resolutions 2, 3 and 7). 

The AIM market is sometimes described as the Wild West of the London Stock Exchange, a place where growth potential meets regulatory flexibility. But for long-term shareholders in RTC Group Plc (RTC), the current landscape feels less like a frontier of opportunity and more like a fortress of board entrenchment. 

RTC has become the latest flashpoint for a growing movement of private investors who are no longer willing to sit quietly while their capital underperforms. Led by veteran investor and ShareSoc director David Stredder, a group representing a formidable 24% of the company’s shares has moved beyond mere grumbling on bulletin boards. On their behalf, David Stredder has tabled formal resolutions to overhaul a board they believe has lost its way. 

Executive Pay 

The core of the dispute is a disconnect between executive reward and shareholder return. David Stredder, who holds 5% of the company, has spent years attempting to engage with the board to address the remuneration of the Executive Chairman/CEO, Andy Pendlebury, and the Finance Director, Sarah Dye. 

The figures are stark. Comparators flagged by dissenting shareholders suggest that the executive team may be overpaid by up to £500,000 per annum relative to the company’s size and complexity. In a letter to the board dated 8 April 2025, I pointed out that while RTC operates in the same low-margin recruitment space as giants such as Hays, its margin (1.87%) lags significantly behind. I argued that with disciplined cost management and a rightsizing of executive pay, RTC’s margins – and its valuation – could be up to 50% higher. 

Governance Gap 

Perhaps more concerning is the structural nature of RTC’s leadership. Andy Pendlebury currently occupies the dual role of Executive Chairman and CEO. For any student of the UK Corporate Governance Code, this is a red flag. The roles are intended to be separate to provide a check and balance on executive power. 

No Engagement 

In refusing to engage with a group that speaks for nearly a quarter of the company’s shares, the board has effectively forced the activists’ hand. The result? A resolution to appoint two new independent Non-Executive Directors (NEDs), one of whom is slated to take over as an independent Chair. The company has responded with a defensive RNS announcement, which many have described as aggressive and hyper-critical.

In my view, it is a mistake for the board to respond by attacking David Stredder, who is widely respected in the investment community. In doing so, the current directors may have shot themselves in the foot. 

Deep Value in Hiding? 

The tragedy of this conflict is that underneath the governance theatre lies a solid business. RTC’s core brands, Ganymede and ATA, are essential cogs in the UK’s infrastructure machine, providing labour for rail, energy, and smart metering – sectors with a £700 million pipeline. 

Independent analysts and “Deep Value” specialists have estimated the fair value of RTC shares to be as high as 216p – nearly double the current trading price. RTC is a debt-free, cash-generative business with a healthy dividend yield, but its fundamentals are ignored by a market that discounts companies with poor governance and perceived board opacity. 

The graphs below (source Stockopedia) show the historic underperformance and the recent boost since David Stredder’s intervention.  

A Call to Action 

The situation at RTC is a litmus test for the AIM market. If a board can ignore a 24% shareholder block and maintain an Executive Chairman governance structure while paying itself significantly above the median, what protection do smaller retail investors truly have? 

The upcoming AGM is not just about RTC; it is about the principle that boards work for the shareholders – the owners of the company. David Stredder and his supporters are not looking to harm their company; they are looking to professionalise its governance and unlock its intrinsic value. 

Investors need to choose between “basking in the success” of a share price recovery from Covid lows, as the board suggests, and demanding the 50% re-rating that proper governance and margin discipline should provide. 

It’s time to vote to end complacency at RTC. 

Voting Recommendations 

I recommend that shareholders vote FOR David Stredder’s resolutions 10 and 11, and AGAINST the re-election of Andy Pendlebury, the Remuneration Report and the waiving of pre-emption rights (resolutions 2, 3 and 7). 

• Voting for RES 10 and 11 signals your disapproval of the existing directors and their strategy and the need for 2 independent directors, Paul Hooper and Gerald Oates with Hooper slated to take on the role of Chairman. 

• Voting against Pendlebury (RES 2) signals shareholder dissatisfaction with the combined Chairman and CEO role and the way he has refused to engage with David Stredder and other unhappy shareholders. 

• Voting against The Remuneration Report (RES 3) signals shareholder dissatisfaction with the levels and structure of remuneration. 

• Voting against waiving pre-emption rights (RES 7) signals that some shareholders do not want more shares to be issued at the current price. 

 Cliff Weight, ShareSoc member and member of ShareSoc Education Committee and Policy Committee. 

DISCLOSURE: Cliff holds shares in RTC Group.