By Stephen Mayne
January 17, 2008
In part two of a 14-part series examining the 1998 annual meeting season, business editor Stephen Mayne, who has bought shares in 50 companies, previews the major action coming up this week.
This week is the height of the 1998 annual meeting season with no less than 15 of our top 150 companies gathering with shareholders.
The week opens with Savage Resources today in Sydney - one of the few mining companies left in the harbour city. Like most miners, Savage has struggled over the past year in the face of low metal prices so shareholders will not be happy. Its share price has fallen from a high of $1.45 in February 1997 down to a low of 53c in August. However, it has subsequently bounced to finish at 75c on Friday, partly on takeover speculation.
Tuesday should be a happier day in Sydney with the booming utility company AGL and thriving bionic ear outfit Cochlear set to deliver more good news to shareholders. AGL seemingly cannot do anything wrong in the energy business and is even profiting nicely from Victoria's gas crisis. Its stable cash flows have driven its share price to a high of $13.05 in February which has been fantastic for shareholders who bought the stock for less than $5 in 1996.
Chief executive Len Bleasel is one of Australia's best but the perennial question of lifting the NSW takeover protection limiting shareholders to 5 per cent should be raised, because this removes any takeover premium from the share price. The meeting will also bring long-time AGL director Sir Ron Brierley back to Sydney. The wily corporate raider no doubt wishes the embattled Brierley Investments had bought into more companies like AGL.
Cochlear has performed even more spectacularly than AGL, such that Pacific Dunlop should be embarrassed it floated this innovative and world-leading company for just $2 in 1995. The stock closed at $7.85 on Friday so shareholders should give Catherine Livingstone the only female chief executive of a major listed company - a standing ovation.
These first three meetings I'll be attending as a visitor but on Wednesday morning I'll be heading down to Melbourne where most of the action is for the rest of the week. As a shareholder in both of Joseph Gutnick's flagships Great Central Mines and Centaur Mining and Exploration, I'll be asking a few questions at the Gutnick-owned Kimberley Gardens hotel in East St Kilda on Wednesday and Thursday. Gutnick's midas touch has evaded him this year as his Centaur shares have dived from a high of $2.33 in September 1996 to Friday's close of just 48.5c. Likewise, Great Central is off from a peak of $4.10 in 1996 to just $1.32 on Friday. Gutnick is famous for having suportive shareholders, including a large following in the New York Jewish community, but it will be interesting to see if shareholders are as supportive this year.
The relationship with Robert de Crespigny's Normandy Mining is the key issue. Normandy has bankrolled Gutnick personally and is exerting increasing influence over the group. Centaur's move into nickel (its Cawse project) has also absorbed much capital just when the nickel price is depressed.
Alan Jackson's Austrim meeting in Melbourne on Thursday should also be interesting given its chequered year. While most people would have expected Jackson to retire to his beef properties after building BTR up over 25 years, the man has decided to start again to try to build another top 100 company. Jackson bought Austrim cheaply from BTR, sowed most of his superannuation money into it and then signed up Kerry Stokes and packaging billionaire Dick Pratt as major investors.
After Jackson took over in late 1995 the shares rocketed from less than 50c to a high of $4.80 14 months ago. However, they are now back at $2.12 as Jackson attempts to extract value from his flurry of takeovers, the most recent being of National Consolidated.
Jackson is close to Seven Network chairman Kerry Stokes and will attend its annual meeting in Melbourne on Friday as a non-executive director. There are plenty of interesting issues for Seven shareholders, but they should not complain about the issue of 3 million options to new chief executive Julian Mounter since they are exercisable at $5.29 and Seven finished on Friday at $4.39.
The company bought way too much programming and it will be interesting to see if Stokes blames former chief executive Gary Rice for any problems or takes the rap for pay-TV write offs and the foray into Hollywood studio MGM.
Struggling packaging giant Amcor is bringing its AGM to Sydney this year. Chairman Stan Wallis will no doubt be asked about its disappointing share price and perhaps face questions about his position, given the growing recognition that former chief executives should not continue on as chairman.
The Australian Shareholders Association will swing into action in Queensland this week, opposing the issue of 3 million options to Villa World managing director Doug Merritt, because of insufficient performance hurdles.
The ASA, which now has 3000 members across Australia, is planning to target a range of companies during the remainder of the 1998 AGM season, including: ANI, AWA, Burns Philp, Coal & Allied, Crown, David Jones, Davids, FAI, Holyman, Hudson Conway, MIM, MacMahon Holdings, Mayne Nickless, Metal Manufactures, Newcrest, Pacific Dunlop and RGC.
* Any readers who would like to suggest questions can contact us by phone on (02) 9288 3000, by fax on (02) 9288 2594, by post to GPO Box 42452, Sydney 2001, or by email at annualmeet@hotmail.com.
TODAY: Savage Resources; Sydney.
TOMORROW: AGL, Cochlear; Sydney.
WEDNESDAY: AIG, Centaur; Melbourne. ANI; Sydney.
THURSDAY: Great Central, Transurban, Austrim; Melbourne. Delta, Telecasters; Sydney. Jupiters; Gold Coast. Futuris; Perth.
FRIDAY: Amcor, Pioneer, Arthur Yates; Sydney. Seven, Country Rd; Melbourne.
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