Executive Summary: February 02, 2010
By Scott Rochfort | smh.com.au | 02 February
The drilling company AJ Lucas might have some more explaining to do at its annual meeting this year over its remuneration policy.
Yesterday the Macquarie Park company warned it would suffer a normalised first-half EBITDA profit of ''minus'' $18 million and pay no interim dividend - all blamed on ''the legacy of management missteps from the previous financial year''.
''As a result of the company's poor operating performance in the first half, the timing of projects and the extent of the investments made in the energy assets, cash flow in the past two months has been tight,'' the company announced.
Its chief executive and chairman, Allan Campbell, has headed the company since 1995, and it's doubtful the Steve Austin (aka Six Million Dollar Man) of the drilling and coal seam gas sector has experienced any cash flow problems himself.
Campbell's base pay in the past 10 years has trebled. Last financial year, on top of his $505,000 salary, he bagged a $6.48 million cash bonus and $614,836 of share-based payments. The bonus related to the sale of the group's coal seam gas assets in the Gloucester Basin, near Newcastle, for $259 million.
Last financial year the company paid executives cash bonuses of more than $16 million in relation to the deal, compared with shareholder dividends of $6.3 million.
Campbell said at last year's annual meeting that AJ Lucas ''is unapologetically a company which rewards success''. ''At Lucas people are expected to step up, take responsibility and perform. That is the culture,'' he told shareholders.
''Lucas is not embarrassed by the amount of the reward earned by those executives responsible for the generation of its capital gain because of the magnitude of the value uplift.''
Lucas shares have fallen 26 per cent since the November meeting.
STARRY FIND
Executives of the coal seam gas company chaired by the former deputy PM John Anderson seemed to be already in a buoyant mood when the group's ''proven and probable'' (aka 2P) gas reserves were upgraded yesterday.
Eastern Star Gas lifted its 2P gas reserves from 602 petajoules to 1520 on December 31. ''This upgrade is testament to the hard work and technical ability of the Eastern Star team,'' blurted its managing director, David Casey. And shareholders wondering whether Casey has been rewarded for this feat need not worry. He popped the champagne several months ago.
Eastern Star missed one of two targets approved by shareholders at the 2008 annual meeting that would have allowed Casey to exercise 1.25 million options at 45c a pop, but it seems the board took a flexible approach to the agreement.
Although the company missed the first target - finding 400 petajoules of 2P reserves by January 31 last year (for Casey to exercise 625,000 shares) - its annual report says the board used its ''discretion'' to vest the shares because 83 per cent of the target was achieved.
For the second target, which was met, Eastern Star had to certify 600 petajoules of reserves by the end of last year. Casey's shares vested in August. In awarding the final batch of shares the company highlighted the ''significant contribution of the managing director''.
BRISCON IS GOZ
BrisConnections, the company famous for turning small shareholders into big debtors, was finally feeling triumphant yesterday.
The Trevor Rowe-chaired toll-road said 99.4 per cent of its remaining unit holders had paid the third instalment of the group's third listed, $390 million instalment.
This is a far better strike rate than the second instalment, where unitholders only paid up $102 million of the required $390 million. It is not every day a company gets to boast about not bankrupting shareholders.
All the Macquarie-listed company needs to do now is finish building a toll-road and attract some traffic.
XIAOXIAO IS BORN
The Chinese childcare operator Xiaoxiao has finally lifted its cone of silence to tell the market it will list on the ASX today, two weeks late.
Yesterday the company said it had raised about $6 million from its initial public offer, and would list with a market capitalisation of $36 million. The boss, Madame Tong Yongrong, will retain an 83 per cent stake.
Xiaoxiao operates nine childcare centres and one art school in mainland China. In comparison, ABC Learning had a market capitalisation of about $3 billion at its peak, with about 2200 centres in Australia, New Zealand, Britain and the US.
Xiaoxiao plans to spend $3 million from the raising on new kindergartens and said $100,000 will go towards ''research and development''.
First published by Smh.com.au on February 02 2010
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