A few notes from the AGM: @vic_wattle Firstly the Chairman was...

A few notes from the AGM:
@vic_wattle
Firstly the Chairman was clearly extremely relieved to be reporting Q1 profit, and expecting H1 profit of 5-700k. It certainly didn’t stop a few questions regarding remuneration esp NED rumenartion growth vs company performance decline, which I’m sure was somewhat embarrassing for Graeme.
It also seemed as though the incentive structure was a bit complex esp as the performance is so cyclical and therefore hard to strip performance from tailwinds/headwinds.

The main point I liked hearing was the accountability as mentioned by Adam. Alex the previous MD was pushed. It seemed his schizophrenic strategy of trying to expand into china then South East Asia, was not necessarily supported by the rest of management although clearly the board was complicit in previous decision making. Although Graeme tried to downplay the effect, I’ve no doubt the distraction and capital that was wasted on overseas ventures is the main reason the share price is where it is. The ‘focus’ is now squarely on the Aussie infrastructure spend particularly on the east coast. Reading between the lines particularly after the meeting, it sounds like they are as busy as they could possibly be and are trying to increase capacity in the core korvest and ezystrut work. They are winning big contracts, and tendering frenetically at present, and believe that as the work ramps up, and as the smaller cheaper competitors become overloaded, that Korvest will benefit even further.

The increased cost of electricity, and steel has hit them very hard. I’m trying to recall the number given, from memory it was an energy cost increase of >100%, and a raw material increase of 40%, and 500k effect on the bottom line. They predict energy costs to increase slightly this year and decrease the year after (with 3 year contract). They are considering a large solar spend which should have a payback of 4-5years. They also flagged a new boiler into CAPEX this xmas.  
They are passing on the cost increases successfully so far this year and expect further prices rises this year.

Power step and titan seem to be busts, although certainly benefiting from renewed mining investment.

Chris the interim CEO was very impressive. Clearly a hands on guy who can articulate the challenges and progress being made very well. I hadn’t met him before, but was encouraged that if they go with him on a permanent basis - we hopefully have a capable leader.

I’m out at present but will post the forecast infrastructure spend chart that’s been floating around as it shows the big projects that KOV is aiming itself towards  - M5, north west rail, west connex etc etc. I have a funny feeling that next AGM will have a happier group of shareholders.

I’d be interested in others feeling about Korvest valuation moving forward. I happily bought more today. They must be trading at or below true NTA at present. I think this could be the next infrastructure play to turn the corner ala GCS, BOL, LYL, MND etc.