Blue Sky down to 2 directors

Scott O'Donnell.

Blue Sky Meats is down to two directors after shareholders at the company's annual meeting voiced concerns about the reappointment of Andy Lowe and he was not re-elected.

In a letter to shareholders, chairman Scott O'Donnell said the Southland-based meat company hoped to be able to appoint two directors "within the next couple of months".

Last year, three directors - including the company's founder and chairman Graham Cooney - stepped down from the board because of an age-limit clause in the constitution.

Mr Cooney, Peter Houlker and Malcolm McMillan were unable to continue as the constitution debarred individuals from being directors once they reached 65. The board had remained at three since October 2016.

Mr Lowe, the managing director of Lowe Corp, who has more than 30 years' experience in the meat and meat by-product industries, had been a director of Blue Sky Meats since 2014. He retired by rotation this year and offered himself for re-election.

In his letter, Mr O'Donnell said shareholders present at the annual meeting on August 21 voiced "some concerns" regarding Mr Lowe's reappointment, when the resolution was put for his re-election by rotation.

As the vote by a show of hands was inconclusive, the required minimum of five shareholders requested  a vote based on shareholding, or a "poll", which was carried out, the votes of shareholders present being taken.

The announcement of the poll result had been deferred until legal advice had been taken. That had now been received and confirmed the process adopted by directors.

The company's constitution required any proxy to be submitted to the company 48 hours before any meeting. As many proxies were not received within that time, they were unable to be counted, meaning the vote was determined by less than 10% of the shares, Mr O'Donnell said.

Mr Lowe accepted the outcome and Lowe Corp retained its 17.94% shareholding in Blue Sky Meats.

Mr O'Donnell said it was a concern that a small number of shareholders holding a small number of shares could create that situation, but it was in line with the constitution and the company was bound by it.

"It does however mean that the largest shareholder, up until very recently, has been excluded from participating in the company as a director," he said.

At the annual meeting, directors and chief executive Todd Grave spoke about the contribution Mr Lowe had made to the company, particularly his demands the company improve its operational performance.

Blue Sky Meats posted another $1.9million net loss after tax for the year to March, but first-quarter financial results, presented to shareholders at the meeting, showed a significant improvement, with a net profit before tax of $844,000.

Mr Grave said it had been the strongest  start to the fiscal year the company had had in a while.