In the almost 17 months since I retired from work, I have started making an effort to attend corporate AGMs where I have a direct or indirect interest.
[Direct interest is where I am a shareholder. Indirect interest is where I get my mother to appoint me as a proxy to vote her shares in the entity currently known as Insignia Financial Group, and which previously was known as IOOF.]
I had a bit of a dilemma this week as Insignia Financial Group held their AGM on Thursday in Melbourne, at the same time as one of the companies I hold (WAM Capital) was holding their meeting in Sydney. Washington Soul H Pattison were also holding their AGM in Sydney on either this Wednesday or Friday.
I was originally planning to make a holiday of it and go to Sydney for the AGMs, even though claiming a tax deduction for the trip would be too a long bow to draw.
But ultimately, the desire to attend the Insignia AGM and not splash cash on a trip to Sydney won out.
It does help that a close friend has recently bought IFL shares on spec and was willing to accompany me to the AGM.
I did attend last year, and was seriously underwhelmed at the time. The share price was in the dolldrums and the only questions anyone would raise are the banal ones by the ‘volunteer monitor’ from the Australian Shareholder Association about directors’ tenures and other directorships (frankly, if this is all the ASA can do, I am glad I don’t belong). More importantly, the refreshments afterwards were merely some pastries with coffee.
What a difference a year makes!
Let’s start with the questions raised from the floor. Yeah, the ASA ‘volunteer monitor’ was pretty boring, but there were a wide range of other people willing to stand up.
You see, IFL recently ‘paused’ its dividend, which is corporate doublespeak for not having a dividend. This is due mostly to needing cash on hand to remediate various of the corporate misdemeanours the company needs to atone for.
Cutting out a dividend payment is a sure fire way to anger otherwise placid shareholders.
Several people raised this – including people who are accountants and investment advisers. One chap who is a long term shareholder went back through all annual reports from 2019 onward and pointed out that all reports contain the same optimistic language and buzzwords about improving the performance of the business, but that the reality did not match the language.
My friend and I were checking the Commsec app on our phones throughout the meeting, and wondered whether the criticisms by angry shareholders had a direct link to the share price dropping 3% in the first hour of trade.
The refreshments after the meeting were a marked improvement on last year. Gourmet sausage rolls and quiche, along with fruit platters, macaroons, and other desserts. [I am a fiend for sausage rolls and did not need lunch.]
Afterwards, my friend and I popped around the corner to the Kelvin Club for a refreshing ale before hopping on a train back to the western suburbs.
I stopped in on the way home at my mother’s house to update her on the outcome of the AGM – she has been annoyed by the cessation of dividend payments this year – and on the refreshments. She observed that her money as a shareholder is paying for those sausage rolls I enjoyed.
Lost For Words! 