Shareholders suffer in JCB feud

JCB, one of Britain's biggest privately owned companies, has waived a dividend for the third year running in a move being linked to a feud among the founding Bamford family.

Despite chalking up pre-tax profits of £16.8 million last year, the world's sixth largest construction machinery maker said it will give its shareholders nothing.

The principal loser is Jayne Ellis, the mistress of the late Joe Bamford. He built the empire from a shed with only 50 shillings (£2.50). When he died in 2002, Bamford left the bulk of his fortune, estimated at £200 million, to Ellis, having cut his wife Marjorie and his sons Anthony and Mark out of his will.

The family is contesting the will even though Marjorie, who supported Bamford as he built the business, died aged 85 last Christmas Day.

Bamford lived with Ellis, a former secretary in his typing pool, in tax exile by Lake Geneva for 30 years, but never married her because his Catholic wife would not agree to a divorce. Ellis, now 57, was left dividend income from half the JCB business for the rest of her life.

The decision to issue no dividend comes as observers speculate on the future of the company following the disclosure that Sir Anthony Bamford, chairman and son of the founder, is stepping down as managing director.

Chief executive John Patterson is not a family member and Sir Anthony has yet to name a successor, though son Joe, 26, recently started work at the company.

Sir Anthony, 59, has dismissed suggestions that he is about to retire from the company, where sales grew 12% to £902 million last year.

He said the changes were a 'recognition of the excellent job John (Patterson) has done. I will still continue to be actively involved.' JCB, famous for its yellow diggers, exports about 75% of its production to 140 countries and employs 4,500 staff.

Latest accounts contained the revelation that the company has reduced a £100.5 million pension fund deficit by only £7 million in the year to December 2003.

However, the scheme's assets rose in value in the latest year from £174 million to £217 million.