agm summary

The board - the chairman was a good speaker, the CEO seemed bored, the CFO gave me some good information and the other 3 didn't speak.

The presentation - the presentation didn't say much.

- Legal costs were significant in 2009 and 2010 financial years but should be far smaller in 2011 FY, less than half what they were in 2010. That'll be a saving of $750k-$1m.

- A major shareholder sent a letter requesting that the company be orderly wound up to release the $0.30 NTA. The directors responded that the present NTA is $0.19 but could improve to $0.29 if the cancellation of shares is approved (+$0.02 NTA), the Japan property is sold (+$0.01 NTA) and the properties with non-recourse debt are sold for book value (+$0.07 NTA). If the non-recourse debt properties are sold for above book value then there could be further NTA above $0.29. They seem unlikely to wind up the company, but they do want to take action to drive the SP closer to NTA.

I asked the CFO some questions, here's her answers:

- There were 30 employees at July 2009, this was cut to 6 people toward the end of the 2010 FY, so we paid for 30 employees in FY2010 ($5.5m). I am guessing this expense will fall to $2m in FY2011 now that there's only 6 (but including board). A saving of maybe $3.5m.

- CFO told me that they are meeting the interest cover ratio loan covenant. She wouldn't elaborate. So it seems we are servicing our debt successfully in Nov 2010.

- 2010FY included $14m in one-time losses on sale of assets. This shouldn't occur in 2011.

- They didn't release any numbers for the first months of 2011FY. She told me to wait until February 2011 for more numbers.

- Also our interest expense in 2011FY should be lower. Maybe from $12m down to $8m ($4m lower), I am unsure, just guessing.

One shareholder asked the chairman if we can service our debt with cashflow. Chairman didn't answer clearly. The CFO's answers suggest we can.

My thoughts are that we could see profit in 2011 or a much smaller loss. According to the CFO we are paying down debt successfully, that's good. I'm hopeful. At least we can move closer to NTA.