1998 Telegraph series - preview of week five

By Stephen Mayne
January 17, 2008

As our 14-part series examining the 1998 annual meeting season moves into the home straight, The Daily Telegraph business editor Stephen Mayne, who has bought shares in 50 companies, previews the major action coming up in week five.

Week five of the 1998 annual meeting season kicks off today and if anything the pace quickens.

I will be in Sydney for the week and asking questions at building and energy company Boral today and gaming machine company Aristocrat tomorrow. On Wednesday it's questions for property developer Mirvac and on Thursday Frank Lowy's Westfield Holdings. Friday offers food group Goodman Fielder and Macquarie Bank's Infrastructure Trust Australia.

The Boral meeting promises to be a long affair with the usual contingent of greenies sharing the floor with the voluble Jack Tilburn and other shareholders. Managing director Tony Berg will be reminded of his 1994 promise - now dismissed as "a throwaway line" - to double Boral's share price in five years. To achieve this the shares need to push $8 but hit a low of $2.21 in September and on Friday were at $2.48.

A $119 million writedown of half its Asian assets sent last year's bottom line profit tumbling 79 per cent to just $85.9 million. Like all building stocks, Boral has also suffered from fears of a housing downturn.

AWA, the NSW TAB and Aristocrat have spread the resources of gambling critics thinly by organising for their meetings to clash tomorrow.

Assuming there are four two hour blocks a day available for companies to avoid a clash and the annual meeting season lasts for six weeks, the probability of the three gambling houses all choosing the same block is 1:1.78 million. What an amazing coincidence?

It will be interesting to see how the respective boards respond but Aristocrat shareholders should be delighted after the stock surged 20c to a record $5.25 on Friday. The prospect of Aristocrat's largest shareholder, Simon Ainsworth, sending lawyer Aleco Vrisakis to ask aggressive questions has dimmed after a settlement with the company last week.

The seven sons, wife and former wife of founder Len Ainsworth still own about 56 per cent of Aristocrat but have no say in its operation and relinquished their voting rights after a dispute with the Colorado Gaming Control Commission. With an estimated 30,000 NSW machines in need of replacement, Victoria's Tabcorp committing to 6000 new machines and hopes rising for a Nevada licence, Aristocrat's prospects are good.

While Aristocrat will attract less than 200 shareholders, more than 1000 are expected at the inaugural TAB AGM at Rosehill's Sydney Turf Club, also starting at 10am. If the five hour Telstra marathon is anything to go by, chairman Gary Pemberton will be doing well to wind things up for lunch, even though TAB shares have risen 50.7 per cent since June to finish at $3.09 on Friday. Issues likely to be raised include developments with the TAB's poker machine monitoring business, the progress of Sky Channel and the proposed joint venture with AWA for Keno in hotels.

If Aristocrat is wrapped up quickly, I could dash across town to the South Sydney Junior Rugby League Club in Kingsford and ask AWA chairman Trevor Kennedy a few questions. The meeting starts at 11am and with the share price still wallowing at 66c after two successive years of bottom line losses, shareholders are likely to be offering more brickbats than bouquets.

The expansion of Club Keno into Star City and hotels should give AWA some upside and shareholders will approve a 15c a capital return.

Tuesday will also see the most dramatic meeting of the week across the Tasman in Wellington, where Brierley Investments shareholders will decide the fate of a proxy battle between the incumbent board and Californian group Shamrock.

The Mirvac meeting on Wednesday will explore the future of the wobbly apartment market and the near halving of the company's share price since its peak last year.

Shareholders in Frank Lowy's Westfield Holdings should be delighted with the stock rising from an equivalent of 45c in 1990 to $6.85 on Friday. Opponents of Westfield's planned development at Bondi Junction might show up again on Thursday and the recent sale reducing the Lowy family's stake from 43 per cent to 30 per cent will also draw some questions.

The amazing share price gains - driven by the large fees Westfield Holdings extracts from developing and managing the shopping centres owned by Westfield Trust and Westfield America Trust - have left about 50 executives sitting on profits of more than $1 million on their options.

The week closes with Goodman Fielder which has a good story to tell and is asking shareholders to approve another large options package for English chief David Hearn, who has signed up for five more years. Chairman David Clarke should receive a warm reception but his Macquarie Bank compatriot, Mark Johnson, might face difficult questions about Macquarie's huge performance fees at the Infrastructure Trust Australia meeting.


Today: Boral: Sydney. Energy Equity Corp: Perth. Perseverance: Melbourne.
Tomorrow: TAB, Aristocrat Leisure, AWA: Sydney. Spotless Services, Spotless Group: Melbourne. Brierley Investments: NZ. Consolidated Rutile: Brisbane.
Wednesday: Mirvac: Sydney
Thursday: Westfield Holdings, National Foods: Sydney Friday: Goodman Fielder, Infrastructure Trust Australia, Hills Motorway: Sydney. Southcorp, Adelaide.