@Alltypes I think you misunderstand me: I do not for a minute...

@Alltypes

I think you misunderstand me: I do not for a minute vouch, or apologise, for KOV executives or management.

As it happens, I share your views that they have done a spectacularly lousy job.

Specifically, there are some key areas that warrant criticism of KOV management:

1. The "top-of-the-cycle" acquisitions of Power Step and Titan,
2. The ill-considered and costly foray into trying to set up some form of representation in Asia,
3. The lack of focus on cost control during the downturn in the resources cycle, and
4. The confusing and schizophrenic corporate strategy that swings from pursuing organic growth to making of acquisitions, and back to organic growth again (which, I sense, is the current flavour of the month).

However, despite this lack of love and attention to the business by its management (indeed, the active neglect of the business by management and its strategic blunders), and despite the demand for the company's products having fallen off the cliff over the past 12 months, the company is still able to wash its cash flow face at the bottom of the cycle, without any recourse required to shareholders to tide the company over.

As I have said many times before; this company has many warts, included its management.

But it is almost being priced like it is going to cease to exist.
And I don't agree with that; I think it will see out a few more cycles yet.


As an aside, I am curious as to whether the MD was pushed or actually resigned, either way, it’s a two fold problem for the Chairman on the following basis –

1. If the MD wasn’t pushed, one can only assume that the Chairman is comfortable with the current position of the business and its management team = problem. . .

2. If the MD was pushed (and it will be revealed in next years annual report under MD remuneration), why has the Chairman not come clean about this = problem. . .


Yes, spot on.

As an activist shareholder, this is exactly the angle that I am taking for my next engagement with the chairman.

As you probably recall, I have been a shareholder of the company for most of the past 15 years, during which time I enjoyed very attractive returns on my investment.

Most of my happy memories with the company coincided with Hills Industries accompanying me as a shareholder, and the Chairman I mostly knew at the helm of KOV was Hill's nominee director, Peter Stancliffe.

I sold my long-standing holdings about 18 months after the acquisitions of Power Step and Titan, when my suspicion that they were dud buys, was confirmed.

So, this is my second time round as a shareholder, being relatively new to the register (I have been buying shares over the past 18 months), so I have not had the opportunity to engage personally with my company's board.

Pending other movements on the share register over the past 12 months, through my various family entities, I now speak for a collective number of shares that would see me a Top 10 shareholder (based on the 2016 Annual Report) of the company.

It is in that capacity I have written to the chairman in recent months, listing my reservations about the way the company is being managed - including the performance of the Managing Director and indeed and the entire board of directors.


I have also been contacted by other significant shareholders for an exchange of views about the performance of the company.

To where this might lead remains to be seen, but my sense is that any appetite among owners of the company for "more of the same" going forward has been well and truly exhausted.

I intend to travel from Sydney to Adelaide to attend the upcoming AGM.

Can I ask if you are currently based in Adelaide?


(To @Just_a_guy: I suspect the comments above provide an unambiguous answer to your question, "Anyone have any specific thoughts on Alexander moving on? Good/bad/indifferent for KOV?")