Petersville one of the very first

February 13, 2008

This Karina Barrymore report in the Herald Sun captured the mood at one of my very first AGMs, Petersville Sleigh, held on November 22, 1990.

John Spalvins yesterday told Petersville Sleigh and National Consolidated shareholders their companies were suffering sharp downturns.

He said at National Consolidated's annual meeting that sales for the first three months of the year were down 13 per cent, earnings were down 36 per cent and that shareholders would not get an interim dividend.

Since balance date, National Consolidated had lost $9 million on the sale of its investments, including a $20.2 million loss from the writeoff of options in David Jones.

But Mr Spalvins said the company had reduced debt by $123 million since the June balance date to $410 million.

Earlier, at the Petersville annual meeting, Mr Spalvins told shareholders that the group's operating businesses were slightly down on last year and that dividends from its large investments in Tooth and Adsteam would be much reduced.

But he said earnings would cover interest on the company's debt and the group's bankers were poised to sign new loan arrangements.

Mr Spalvins confirmed that Petersville's 21 per cent stake in associate Tooth & Co was for sale - but not at the current low prices.
Petersville spent $245 million on its Tooth stake and at present prices it is worth only $75.93 million.

Mr Spalvins refused to comment about the potential $100 million book loss if the stake was sold. The stake is in the accounts at $188 million.

While Petersville shareholders were critical of Mr Spalvins, National Consolidated shareholders had nothing but praise for their chairman.
They blamed the massive fall in their share price on brokers, banks and the media.

The meeting in Melbourne was more like a John Spalvins support rally than a meeting of shareholders who have lost considerable share value.

"Because of talk from stock brokers and media we've seen the share price of all companies in the group collapse - to the mutual hurt of all the companies," one shareholder said.

The shareholder, who did not give his name, said National Consolidated was performing well until "leprosy" set in from revelations in the media and from stockbrokers.

The shareholder, who received applause from the meeting, said the banks had panicked because of the share price fall and had "sabotaged" the group to the point where it was forced to sell assets.

"I notice that this leprosy that has inflicted the company does not seem to be inflicting the major institutions. I find that the biggest invstment groups in Australia and insurance companies have substantially increased their shareholding," he said.