Chairman fields sticky queries at Carter Holt annual meeting

By PAM GRAHAM

The business of Carter Holt Harvey's annual meeting proceeded apace yesterday until Max Gunn, now in his 90th year, rose to his feet.

Had the auditors warned the board that the company's forests were overvalued?

No they had not, said chairman John Maasland.

"Then I would suggest you have a good look at their remuneration," said Gunn.

Why was a battalion of executives earning more than $100,000 a year, why was the "money spinner" tissue business sold and why was the share price half the level of 1995? he asked.

"I had hoped to have at least one annual review before I reached my 90th year to offer words of congratulations. Now it seems quite likely that I'll have to stay the distance until I reach a century."

Maasland dealt with the questions issue by issue, supported by chief executive Peter Springford.

Tissue was a fast-moving consumer goods business selling to a smaller group of increasingly powerful customers.

The industry was no longer protected and was consolidating into a handful of global players and Carter Holt considered its future lay elsewhere.

The return to shareholders has risen by more than 30 per cent since last year's annual meeting.

"I believe that what we are doing as a company now will ensure that we will get that share price up," said Maasland.

Gunn did give the company credit for surviving "a disastrous Brierley shareholder and the disastrous chairmanship of Selwyn Cushing" and received support for that view from the top table.

Australian director Helen Nugent was a new face at that table and the meeting reappointed her, Kerry McDonald, Brian McDonald and Andrew Lessin, and reappointed the auditors.

The meeting was all over in an hour, half of which was speeches and presentations.

It was a stark contrast to last year, when striking workers from Kinleith had their say with Gunn and others, clouding tributes to Wilson Whineray on his retirement.

Yesterday there were hints of higher dividends when tax credits became available and that "merger and acquisition activity" was being looked at.

The company's best guess was that dividends will have tax credits attached by the end of next year.

Maasland said dividends had been a "little low" in the past.

Carter Holt has strong cashflow, low debt and is returning only about half of the $1 billion from sale of tissue to shareholders.

There is much speculation about what its disciplined approach to expansion will bring and whether a review of its forest estate, the largest in the country, will come up with a different ownership structure, or sales of forests.

A decision on forests was likely by October, said Springford. The company slashed its forests value by $876 million last year.

Springford will not rule out a bid for Tenon, the former Fletcher Challenge Forests, but its North American assets seem to count against it.

Carter Holt has issues with the Resource Management Act, the price and supply of electricity and new labour laws.

"We are seeking assurances that all these issues will be resolved satisfactorily," said Maasland.

"Failure to secure these assurances will force us to reconsider significant investment in New Zealand."