KEY POINTS:
The annual meeting season, which is now in full swing, usually raises a number of important issues.
This year it was a striking contrast between companies that presented the facts compared with those that focused on delivering messages. There was also a big difference between organisations that offered a warm welcome to shareholders and those with more security checks than Los Angeles Airport.
At one end of the spectrum are Freightways and Sky Network Television, at the other is Vector.
Freightways' shareholders were warmly greeted at the door by Chairman Wayne Boyd and managing director Dean Bracewell. Boyd and Bracewell gave short and informative addresses outlining the past performance and future prospects of the company. This included specific revenue, ebit and net earnings figures for the three months ended September 30 compared with the same three months in the previous year.
A large number of companies failed to give any up-to-date financial information even though the annual meeting is held three or four months after the balance date and shareholders are far more interested in factual information than PR spin.
The Freightways meeting took only 38 minutes. There were no questions from the floor.
The main focus of the Sky TV annual meeting was chief executive John Fellet's address, which is always informative. Fellet ran through a wide range of updated graphs and diagrams. He didn't give any specific financial information for the first three months but he produced a table of analysts' consensus forecasts and said the company was comfortable with them.
A number of companies state they are happy with consensus forecasts but this is of little use to most shareholders unless the specific forecasts are revealed.
Sky TV's meeting was done and dusted in 27 minutes with no questions from the floor.
A number of industry participants, including the Shareholders' Association, had said prior to the meeting they were opposed to the share buyback resolution - which would raise News Corporation's shareholding from 43.6 per cent to 45.9 per cent - yet there was no comment or discussion on the issue.
The entrance to the Vector meeting, which was held at the Ellerslie Convention Centre, had more security guards than a rock concert. There were guards at the front door, at the bottom and top of the lift and at the entrance to the meeting room.
It was probably the most stringently controlled New Zealand shareholders meeting in the past 30 plus years.
Michael Stiassny made it clear that he was responsible for the tight security. He said he had banned cameras because "I don't want a circus and if I want a circus I will pay for one".
He added: "There won't be a camera at a Vector meeting while I am chairman".
But the issue seemed to go beyond this as a number of individuals with no cameras were stopped at the front door.
Stiassny's address, and that of acting chief executive Simon Mackenzie, placed a great deal of emphasis on improving customer focus and service. This objective was difficult to reconcile with the treatment of shareholders at the entrance to the meeting.
The other feature of the formal addresses was that they were unnecessarily long and repetitive. They were full of generalities, had little factual information and gave no specific information on trading for the first three months of the year.
Vector has serious governance issues as reflected by the annual meeting and the departure of three prominent directors, the chief executive and chief financial officer in the past 12 months. The latter two have yet to be replaced.
SkyCity's annual meeting was also long on platitudes and short on facts.
Acting chief executive Elmar Toime, who lives in London, said his main resolve was "to ensure the business was driving forward". He said that the Auckland Casino, which is the group's main operation, was shifting its focus from "fun" to "thrill" and "in essence SkyCity is an 'adults' playground that is built around the 'thrill of gaming'."
It was difficult to understand what this change meant as Toime's address was accompanied by a demonstration video that gave no sense of "thrill".
No specific first-quarter information was released, although directors confirmed they expected full-year net earnings to be 10 to 12 per cent higher than the June 2007 year.
Toime and chairman Rod McGeoch tried to give the impression that the main objective of directors was to create a successful NZX-listed company. But most major shareholders believe the SkyCity board is tired, hopelessly ineffectual and can't wait to be relieved of their duties through a successful takeover offer.
The PGG Wrightson annual meeting was long on optimism but short on facts. Outgoing chairman Bill Baylis said "considerable progress has been made" and managing director Barry Brook believes "we are on the way and the best has yet to come".
Incoming chairman Craig Norgate painted an extremely rosy outlook for agriculture but failed to demonstrate how PGG Wrightson, which was established in 1841, would take advantage of this.
The group's ability to capitalise on booming conditions is a legitimate question because it has disappointed shareholders more often than not in the past. It has also failed to achieve the Pyne Gould Guinness/Wrightson merger forecasts and farmers are increasingly bypassing stock and station agents in favour of the internet to obtain the best deals for their products.
The group is now putting a great deal of emphasis on Uruguay through NZ Farming Systems Uruguay.
Ironically, PGG Wrightson gave little specific information on Uruguay, nor its own first-quarter financial performance, yet two days later the NZ Farming Systems Uruguay annual meeting was notable for its high level of disclosure and its focus on facts rather than vague generalities.
Contact Energy's annual meeting, which was held in Christchurch and not attended by this columnist, was notable for the re-election of Tim Saunders to the board as an independent director, even though the majority of minority shareholders do not want him.
A total of 63.4 million shares, or 69.7 per cent of minority votes, were cast against Saunders' re-election compared with 57.6 million shares, or 53.3 per cent of minority votes cast against him at the 2006 meeting.
Saunders, the former Feltex chairman, was only elected on both occasions because Origin Energy, which owns 50.6 per cent of Contact Energy, voted in his favour.
When the proposed Contact Energy/Origin Energy merger was announced in February 2006 the Australian company delivered a strong message that it would look after the interests of New Zealand investors yet it continues to support independent directors over the preference of domestic shareholders.
Origin Energy's strategy is difficult to understand because if it wants to re-visit the merger proposal, or get shareholder permission for a material transaction with Contact Energy, it will need the support of New Zealand shareholders. This is unlikely to be forthcoming as long as Saunders, and Phil Pryke, remain on the Contact Energy board.
* Disclosure of interests: Brian Gaynor is an investment strategist and analyst at Milford Asset Management.
