1998 Telegraph series - wrap of week seven

By Stephen Mayne
January 17, 2008

This was the final weekly wrap in The Daily Telegraph series covering AGM Season 1998, which featured David Jones and we've included a little post script about the culinary mea culpa from chairman Dick Warburton.

It was hardly a case of keeping the best till last. The final week of the season featured many of Australia's smaller and poorer performing companies, because under stock exchange rules you can only delay fronting your shareholders until the end of November. The week began with the two Davids - Ltd and Jones - in Sydney on Monday.

David Jones drew 310 of its 35,000 shareholders to Sydney's Centrepoint and the majority were grumpy, including one bizarre and hairy exhibit who continually interjected, calling chairman Dick Warburton, "Sir Humphry" and demanding the entire board be sacked.

After "Sir Humphry" and then managing director Peter Wilkinson kept emphasising how much change they had introduced to stores and management, I asked why there had been absolutely no change to the six non-executive directors who in 1995 signed off on a very upbeat prospectus.

Not only did they predict earnings before interest and tax would hit $111 million in 1995-96, they said: "The company believes there are significant opportunities to increase sales and profitability."

The prospectus then spelled out nine ways it could do this. History shows DJs fell $4 million short of that prospectus forecast and has not got close to a $111 million EBIT since, yet those same non-executive directors Mr Warburton, Olympics boss John Coates, former BHP finance director Geoff Heeley, NSW chamber of commerce chief Katey Lahey, Queensland professional director Elizabeth Nosworthy and advertising man Michael Ball - remain on the board.

Mr Warburton accepted it was a fair question and went on to explain that the board had taken action after realising DJs needed a fundamental reassessment of its direction.

This was code for saying: "we sacked the managing director Chris Tideman, got rid of the John Martins brand in Adelaide, closed six stores and are now getting back on track". To its credit, profit this year will be the highest since 1995-96 and the DJs shares price is finally edging back towards the $2 float price, finishing at $1.85 yesterday.

The Davids Ltd meeting was an unusual affair because shareholders present only had themselves to blame for not accepting the $1.10-a-share offer from South African group Metro Cash and Carry this year.

The South Africans, led by chairman Carlos dos Santos, were typically blunt and seemingly all at sea when it came to Australian procedural matters.

When asked why founder John David - who still has 10 per cent and was sitting next to him -didn't take up his converting preference shares, Mr dos Santos replied: "Presumably because he did not have the cash." A commitment in Sydney prevented me from getting to Melbourne for the three hour Crown annual meeting on Wednesday which was not quite as fiery as some observers expected given the casino company's enormous problems.

Julian Stock from the Australian Shareholders' Association aroused enough opposition to force the options package for chief executive Robert Riley and the re-election of Kerry Packer representative Neville Miles to a poll, which was easily passed on proxies.

Crown's controlling shareholder Hudson Conway fronted shareholders in Melbourne yesterday and I sent a proxy, actor Simon King.

He is flying out to live in Los Angeles on Monday and therefore was not intimidated at the prospect of asking questions of Ron Walker and Lloyd Williams, two of the most powerful people in Jeff Kennett's Melbourne.

Walker bristled at the suggestion he might have too many other commitment to justify his executive position and $685,000 salary at HudCon, particularly now it is being turned into an investment vehicle which does nothing except own 37 per cent of Crown.

My proxy was disappointed by the answers given by chairman Sir Roderick Carnegie, the former chief executive of CRA, who continually gave Williams fatherly pats on the back.

Sir Rod didn't even know the name of the Indonesian company HudCon lost $51 million in last year as part of its $242 million pre-tax loss.
Finance director Barry Hamilton revealed after the meeting it was the Suryamas group, associated with the wealthy Chinese Widjaja family, which Williams presumably got to know through the high roller business at Crown.

My proxy only asked five of the planned 12 questions - thinking he would get to ask general question at the end - but still did well enough to earn his $100 fee.

Village Roadshow's strategy of holdings its meeting at 9am next to Movie World on Tuesday on the Gold Coast made it difficult to rustle up a proxy.

No-one mentioned the Liberal Party donations of almost $2 million over the past two years - presumably e
xtracted by Ron Walker wearing one of his many hats as Federal Liberal Party Treasurer -but there were a few raised eyebrows about surging executive salaries, especially given Village's struggling share price.

Four hundred attended the meeting, but only 164 were genuine shareholders. This was the highest ratio of non-shareholder attendees of any major meeting over the AGM season, reflecting the fact that shareholders brought their entire family to take advantage of the free admission to Movie World for the day.

Crown leapt into the top five as far as attendances were concerned, but curiously, were the only company which has refused to reveal an exact number, which observers estimated to be about 900.

It also spoilt shareholders with a bag of goodies, including two hats, a pen, a fridge magnet, $20 worth of gambling vouchers, but, as one shareholder pointed out, no dividend cheque.

That's how DJ's cookie crumbles

By Kim Sweetman, Daily Telegraph, December 13, 1999

DAVID Jones chairman Richard Warburton has reinvented himself as a culinary policeman, throwing his energies into the Case of the Disappearing Gourmet Cookies. Warburton has written to shareholders many of whom have expressed displeasure with DJ's performance of late -to apologise for one unsatisfactory aspect of last month's AGM.

There was no mention about the meeting dissolving into a verbal brawl between shareholders and the board over the company's public float or the shopping discounts available for board members, but the apology concerned the state of the post-meeting tea party at Centrepoint.

Warburton was scathing about the "poor state of repair" of the tower's convention room and lamented the standard of catering.

"We knew long queues formed without assistance from Centrepoint staff," he conceded.

"We further understand that the supply of gourmet cookies very quickly disappeared.

"We can only apologise for this aspect of the meeting which was unfortunately beyond our control."

By way of making nice, Warburton offered sufferers an alternative morning at their own Park Terrace Restaurant.

The letter has outraged the manager of the Blue Rock catering company, Peter Mumford, who told Thirteen: "I'm very reluctantly deciding not to comment."

However a spy at the meeting said DJ's was offering tea, coffee, fruit juice and the infamous gourmet cookies, and all were on hand. But almost none of the board's members sampled the disappearing cookies - for some reason they elected to retire to a separate room.