Morley,Here are some notes from the AGM in no particular...

Morley,

Here are some notes from the AGM in no particular order.

The board are regularly looking at acquisitions. Most offer no value or the owners want an unrealistic price. The company pulled out of a large acquisition during the year due to the business owners having unrealistic price expectations. There are also problems for Ambertech representing competing products.

Ambertech is regularly approached by international companies wanting Ambertech to represent them in the Asia pacific but again there are problems with competing products.

Distribution rights gained for Altec Lansing in Australia NZ.

Shareholder raised questions about cost control in GFC year. Board response was that there have been staff cutbacks in some areas but it was necessary to increase staff in high growth areas.

There was quite a bit of discussion about Goodwill carrying values and valuation growth assumptions. Whilst some of the questioning seemed valid the board pointed out that the balance sheet goodwill was small relative to yearly profit so there wasn’t really any question of impairment.

There was repeated questioning about the company revenue and profit history – the questioning was centred around the failure of the company to generate consistent profit growth despite strong revenue growth. My interpretation of the boards response:
- “the game has changed” – there is more competition in some areas from cheaper imports and this has hit margins and unit values
- the project work revenues are lumpy
- things are on the way up again.

There was questioning surrounding the lack of major contracts disclosure. Many of these contracts are confidential and cannot be disclosed. It was also pointed out to the board that there has been no investment analyst coverage of the company for many years and the company itself has not produced an investment newsletter for several years.


Most of the questioning throughout the AGM came from Niall Cairns who was on the board between 2001 and 2005 and is still a major shareholder through his venture capital company.

Other non-AGM comments. I think HGL is in the process of selling down their holding so this should keep a lid on the share price for a while. ACtually it is hard to see anything driving the price up in the near future if the level of interest in the AGM (and even this discussion thread) is anything to go by. That said, this could turn out to be a great buy for the patient investor (rare that they are). I've added to my holding recently and am looking forward to a big dividend based on the 1st half outlook. A big interim dividend combined with a strong full year outlook could be the news to push the share price higher.