Share plunge engineers a good turnout
January 14, 2008
Christopher Webb from The Age produced this story after the Skilled Engineering AGM on .
Holding an annual meeting within one week of a company's share price being slashed by 36 per cent is one way to guarantee a good shareholder roll-up.
And so it proved with Frank Hargrave's one-time growth stock Skilled Engineering yesterday.
Shareholders turned up in their droves and by the time chairman Kenneth Loughnan, AO started the ball rolling, about 140 people were waiting to hear what had happened to their stock.
Loughnan - who at times appeared eager to wrap up shareholders' question time - did not add a great deal to what shareholders had already learnt from reports to the stock exchange last week.
That was that Telstra had cut back on contracts and that Skilled's earnings would be down by as much as 50 per cent in the current year.
He said he was still not clear on the Telstra cutbacks and that Skilled had "aggressively pursued Telstra" in order to understand what had happened.
Meanwhile, Skilled founder Frank Hargrave took the podium and declared it "was always good to see new faces and old faces".
He said: "It hasn't been all good news, but let's put that behind us ... we think we can grow the business further and further."
He explained that when he started the business 36 years ago it was one business, but the company now had 17 types of business "that we're trying to do".
He said the idea was that the spread of activities would cushion the company when one or more areas had a poor year.
Declaring his usual faith in his company, he said he believed the share price would recover "after this little hiccup, this little glitch".
While Hargrave might dismiss as short term a big earnings cutback and a share price now effectively back to where it was when the group floated six years ago, it was clear that some in the audience were not happy.
One shareholder declared he was upset and angry.
He said it was unconscionable that some Skilled employees and various securities industry analysts were "running around" with knowledge of Skilled's problems ahead of an announcement to the stock exchange.
He said he had lodged a complaint with the stock exchange over what he called a lack of disclosure.
The shareholder said: "I'm under the impression that you've had an analysts' briefing."
Chairman Loughnan responded that there had been no briefing before the release of the results.
He said he was not aware of what analysts were saying and "I can say that the board has acted most responsibly".
"We considered the matter, we considered what the real situation was ... (but we're) still not clear about the flow of work (and that the announcements) were based on the best discussions we've been able to get from Telstra."
Frank Hargrave then chimed in: "I haven't been in the public arena very long. But you get it out to the stock exchange; you don't tell analysts."
Another shareholder then asked Hargrave about a succession plan: "You're 60. Does the company have a succession plan for management?"
Hargrave: "I'm 60; there are lots of good people in the company that could step into my shoes.
"I think it was Murdoch who said the shares would go up if he was hit by a bus."
Hargrave was then asked by shareholder activist Stephen Mayne about his stake in the company.
"Are you a long-term shareholder?" Mayne asked.
"I don't have any intention of selling my shares," Hargrave told the scruffily dressed Mayne.
"If I was starting again, I would start buying the shares. I think the shares are fairly cheap."
He said that when Skilled Engineering shares dropped, it was tough for people, but that was business.
Referring to the shares appreciating, he said: "I'm sure that's what will occur again."
In response to a question from Mayne on the Telstra contract cutbacks, Hargrave said it was not clear what the issue was with Telstra but he thought it was a budgetary issue.
"`It's an issue that will be short term," he said.
Skilled scrip closed yesterday two cents lower at $1.09.
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