I notice today that the new MD Tony Dragicevich has been buying a few shares in the market. Another 50000 to go before he becomes a top 20 shareholder. Nice to see he's putting a bit of money on the line.
Here is what I can remember from the AGM last Friday for those who are interested. Most of this info comes from board responses to shareholder questions and I don't guarantee the accuracy of my recollection as these notes were made a day after the meeting.
Obviously the big thing from Fridays AGM was the trading update. First quarter revenue below that of last year.
Wattyl has had discussions with Woolworths relating to their new hardware venture – that’s about all they said on this.
A Former MD had a go at the board, suggesting they were concentrating on cost cutting at the expense of revenue. He expressed concern that even with around 50 million of costs cut from the business in the past 5(???) years or so that the company is still struggling to make a profit. He also raised Orica(Dulux and a few other brands) as an example of improved results in a tough market and suggested Wattyl needs a better strategy for the future.
Another former employee asked a few questions about the Bunnings relationship and products sold at Bunnings. Most of his questions seemed a bit misinformed as he didn’t seem to know what Bunnings was still selling and what it wasn’t. Killrust, Estapol, Solagard are still number one in their categories(at Bunnings). More shelf space given to Solagard at Bunnings (have seen this in local store myself). Bunnings NZ now selling Wattyl Interior design paint.
There was some discussion of the history with Bunnings and it seems that Wattyl interior paint(which they no longer stock) had never been a big seller at Bunnings anyway.
The new MD didn’t speak to shareholders formally at the meeting.
New director Ian Fraser said a few words about his experience – he seems like the man for the job.
Questions were raised about asset valuations on the balance sheet but the board was comfortable with the values.
Questions were raised about further asset sales – there are no further asset sales planned at present but there is a review of assets in some states to see if there are any more underutilised assets.
A question was raised about the bank refinancing rate – the only info about the rate was that it was competitive. The banking covenants are not particularly onerous and do allow dividends to be paid if those covenants are met.
A shareholder suggested that the Wattyl advertising emphasise “Australian made” and look at changing their advertising company. I actually think the latest Solagard ad is pretty spot on – it’s a lot better than the competition ads that are all on TV at the moment.
WYL Price at posting:
$1.05 Sentiment: Buy Disclosure: Held
