I had some success yesterday.
I received 500k votes, without any publicity as such, and several votes in the
room.
David, the FBD Hotels and Resorts (H&R) manager, gave a reasonably upbeat
presentation – Spain, though fearing Brexit, is progressing well with Taylor
Wimpey now constructing units on 30% of the available zoned land at La Cala.
This is enabling La Cala to pay FBD about €3m a year off the H&R intercompany
loan. Sunset Beach (Spain) is at present returning a 26% profit margin.
The Irish hotels are going reasonably well too. Castleknock is enjoying excellent
capacity usage, and is returning 20% profit margin. Faithleg in Waterford is
going well too. The Heritage, recently bought, was identified by David as being
under-run, so bought for re-development / rebranding. Although early days, a
new sales manager and general manager, have resulted in increased footfall and
public awareness, and David’s hopefull they’ll get back what the hotel
cost inside 5 years, possibly 4.
FBD Insurance [Holdings] has turned around and is making profit in a difficult,
price competitive, market . As their dividend has doubled this year, this should
underpin our dividend next year.
But 3 extra things came up that might be better than the above.
First, the Board, under pressure from a big shareholder in the room, announced
that they would reconsider my suggestion of paying half their fees in shares.
When I asked why, having had the shareprice at 85c for over 6 months, none of
the Board had bought shares in the market, at least to demonstrate confidence
in the Company, Padraig Walshe replied “The Board is under general advice
[from whom ???] not to buy shares, as, because of the frequent times that they
are in possession of ‘insider information’ means that the windows
for doing so are very narrow to non-existent”
2nd. They are also looking at ways of possibly opening up the share register
to new members - possibly changing the constitution. I yet again pointed out
that, as the Board has the ultimate say in every transaction, “in order
to preserve the rural focus and ownership of the Company” the 3 year IFA
membership and FBD insurance usage rule was totally unnecessary. I also pointed
out that if the 3 year rule was scrapped, that the Company could have a stand
at the National Ploughing Championships to attract potential new shareholders
3rd and best !. They're selling the land at Berlin's Airport for way above what
I thought they would get, SEE HERE and,
instead of squandering it, are going to pay down the bank debt AND pay a special
dividend of at very least 7p, hopefully much more, on top of this year's 7p
dividend. The EGM to approve such is targetted for late October.
Again I think my harping on about lack of income for shareholders who became
such in the last few years has finally got through.
I congratulated Padraig on a great result, and I apologised for all the flack
I'd given him over the years about the Airport Land investment, - saying that
I was glad I was now totally taking back that critism.
I got an absolutely amazing spontaneous round of applause. And several of the
"great and the good " of the past IFA, including a former president,
came afterwards and shook my hand.
So I'm feeling reasonably happy on all this, although I’m not holding out
hope of a sudden co-opting onto the Board. I’ll stand again next year.
I mentioned the plight of US and other ‘non authorised jurisdiction’
shareholders. Padraig said that because of EU regulation, especially with regard
to tax, proof of identity, money-laundering, and “duty of care to shareholders”
legislation, the move to Davy was something that was forced on the Company.
That said, he also replied that if any such shareholders could get a willing
buyer, they could do private transactions, or transfer / gift / sell shares
to any relative either in Ireland or in an ‘authorised jurisdiction’
and the Board would look to facilitate such transactions. The Company has a
(small) list of a few potential buyers at Davy, and it’s possible that
Link could be given this too if necessary in future
The elections were held, and, as usual, the Proxies could have decided everything
10 times over, in that the Trust and related entities votes 8m shares. This,
I believe, should not be, in that the Trust should have an automatic Board seat,
and vote like the Co-Ops representatives, not vote as a shareholder.
All motions passed, and Padraig and Michael Kennedy were re-elected.