My Report on the
2020 AGM.
I and 1 other "ordinary shareholder" attended in the room. Padraig
and Bryan Barry sat at the microphones that covered broadcasting.
James Kane, a couple of legal representatives, an enumerator from Link Registrars
and a couple of others I didn't recognise were there too.
Padraig told me that, as he had told other shareholders not to attend, that
he wasn't going to allow me put my questions in person.
He said that if I gave him my questions that he would address them.
After reading them he then said "there are too many, I couldn't possibly answer
them all. I'll answer some and defer the rest to a Board meeting"
For that reason, I am going to post ALL the questions at the bottom of this
report, so that you the reader can see what questions were not addressed and
answers given to those which were.
The meeting started, Padraig read his Chairman's statement in full, and then
passed to David Kelly, the FBD Hotels & Resorts Manager.
DAVID KELLY'S REPORT SUMMARY
Overall position of FBD Hotels & Resorts
Total group (Spain and Ireland) 2019 Revenue was €65m - Projecting €30m
for 2020
Cash on Hand €11m at Jan.1st, after paying €2m to FBD plc. and it's
now €8.5 today [Aug.15th]
Guidance (Difficult to forecast but David's estimate AT THIS STAGE):-
Function income rest of 2020 = €0
Occupancy Sept-Dec = 20%
Loss €3m - €4m [from 2019 €14m profit]
Management have taken salary cuts to at least end Oct.
Subsidies from the Irish Govt will have been worth €1m to end August
( My Note: - This may be the real reason that all
dividends were cut - Revenue could take a dim view of paying furlough to a Company
that then pays dividends to shareholders)
There's been a 6 month moratorium on Capital and Interest repayments to the
Bank [until end September]
All due Taxes & VAT are being paid
Irish Operations.
Q2 Revenue was Zero.
Q3 Revenue down 60%
Q4 Revenue down 40%
Faithlegg & Heritage 88% Occupancy for July & start of August. (outperforming
the Irish Hotel Sector in general) Heritage then was shut because of Laois lockdown
for 2 weeks. Castleknock Occupancy 55% in July, 60% in Aug.
Irish Operational Assets Value likely to lead to a book value writedown of 20%
Spanish Operations
2020 revenue from Spain will have a greater reduction that that for Ireland,
possibly 60%-70%
La Cala - 18 units sold BUT all last year's 37 unit sales fully completed
La Cala estimate (again VERY difficult to predict)
2 scenarios
Optimistic = 10+ more sales (if things open up from Sept. and we can get buyers
out to look at units)
Pessimistic = 0
Other observation on Spain - There are 650 Units contracted with Taylor Wimpey.
Circa 400 are complete or are being built, and are covered by minimum cash guarantees
(from TW) to the end of 2022.
The remaining c. 250 are planned to transfer to Taylor Wimpey by the end of
2022, with guarantees by the end of 2026 for these.
------------- The meeting then went back to Padraig for Q&A. Those of mine
that were answered were the only questions addressed.
The Questions I asked were as follows. Answers are in
Blue.
Questions
1] Exactly how much money a month did we lose during total lockdown, eg months
of April & May?
Answered by David Kelly in his report
2] How much money a month are we losing at present, if we still are ?
Answered by David Kelly in his report
3] The rate of sales of units at La Cala appears to have slowed. How many units
have been sold since 1st January ?
Answered by David Kelly in his report
4] When are we getting the next tranche of Bulberry money, and how much are
we getting ?
Answer:- A lot of the original first tranche was used
to pay off Bulberry's loan notes.
€22m is due Q1 2021, but may be used for further loan note repayment.
Bulberry is expected to liquidate in 2022, at which time, after taxes due, there
should be another substantial payment to FBDplc
5] What is our present “Net Asset Value” per share ?
Answer:- Approx €4 per share.
6] At the last AGM we were paying 3.5% interest on our debt. What interest rate
are we paying at present ?
Answer:- 3% in Ireland. 1.5% in Spain
7] FBD Holdings have stated that their €1 final dividend is postponed,
rather than cancelled. Will we ordinary shareholders get a special dividend,
and preference shareholders a double dividend next year if Holdings pays out
that final dividend?
Answer:- There will be no extra payout for 11% or 14%
Pref. shares. 2020's dividend is gone completely.
It may be considered for Ordinary Shareholders, but that will totally depend
on circumstances
8] None of our shareholders are getting a dividend. Are the Board taking a fee
reduction ?
If so, what percentage?
Answered with regard to Bryan Barry, who is taking a 20%
reduction, but NOT with regard to the other Board members
9] Not one of the Board has increased their shareholding since last year. The
Company has large debt. The Board is being paid in cash. Is it not time that
the interests of the Board were aligned with those of shareholders, in that
the Board should be paid half their fees in Treasury Shares ?
In that way 6 Board members might get to the stage where they could themselves
avail of the 10% FBD discount you highlight in your Chairman’s statement
?
NOT answered
10] Over 45% of the Company’s shareholders are women. Why has the Board
never recommended a woman for election ?
NOT answered
11] 4 years ago you stated “The Constitution is a work in progress”
Why have no further changes to it been proposed in that time ?
NOT answered
12] In that vein, with Shareholders from non-farming backgrounds, shareholders
who are anonymously hidden in Brokerage accounts (the ownership of which can
be changed without the Company’s permission) and non-Resident, non-IFA
and non-FBD insured shareholders, is it not time that the Company dropped the
requirement that a new shareholder must have been an IFA member, AND insured
with FBD, for 3 years?
This need not affect the need for Board final approval.
NOT answered
13] We have shareholders from as far afield as Zimbabwe, Australia and the USA,
where it’s the middle of the night. Why is neither a recording, nor transcript,
of this meeting being made available to them ?
NOT answered
14] Is anything being done to facilitate Foreign shareholders, like those in
the US, who want to sell shares but cannot open an account with Davy ?
NOT answered
15] Is the Company aware that just to register with Davy, or hold funds with
them to potentially buy the Company’s shares, costs €50 a quarter,
even if no transactions take place on the account?
NOT answered
16] You state our “website provides ready access to useful investor information”
including “share trade volumes and prices”. As at 6-o-clock yesterday
Aug. 16th the last deal showing was done on 1st November.
Why is this information not being updated, or are we let to believe that not
one single transaction has taken place in 9 months?
ANSWERED WITH REGARD TO NO TRADES
The Company needs a Director with Communications skills to constantly update
the website, shareholders and potential shareholders. I have those skills, and
could be that Director.
Answer:- There were NO DEALS AT ALL done since last November.
17] Shareholders know little or nothing about Board members, or potential Board
Members.
Will the Board undertake to allow Director Candidates make a 100 word “Reasons
to Elect” Pre-Election Statement which would be published in the AGM notice
?
NOT ANSWERED. Going forward I think that this is essential.
Our shareholders know nothing about the Director candidates
The meeting was informed that the IFA has (re)appointed Joe Healy to the Board
(The last time Joe was on the Board for 6+ years, drew over €25,000 in fees,
but never held any more than 1000 shares
We were also told that the Auditors had advised "that we build a substantial
cash position"
The Resolutions before the meeting were then put. All passed.
Then it came to the election of a Director to the Board. As he has done for
every year I've stood for election, Michael Berkery voted the FBD Trust and
associates almost 8 million shares against me, and for the Board's recommendation,
Barry Donnelly, (another IFA "Old Boy" who has only 11,110 shares in the Company)
Barry got elected.
I got 668,210 votes for me with 8,472,287 against (mostly the Trust).
Barry got 8,939,086 for (again mostly the Trust)
Full results here
----- The meeting then ended and everyone vacated the room, and building. As
stated in the AGM notice, there was no after meeting hospitality.