Leeds Share Discussion Threads

[deswalker] 12/2/2008 10:54

Many thanks to poacher for the AGM report. Your comments are more upbeat than I was expecting and have given me more confidence in my investment.

If they do manage to double the size of Hemmers then surely a move to a Frankfurt listing is the sensible course of events in a couple of years time.

Thks again.

Des

[poacher45] 07/2/2008 17:15

Arthur
Yes I am happy at the moment with the way the company is being run and I had in mind the same valuation as you for the land.
All resolutions were passed very easily and from memory the most voted against was less than 100,000 shares.

[poacher45] 07/2/2008 17:15

Arthur
Yes I am happy at the moment with the way the company is being run and I had in mind the same valuation as you for the land.
All resolutions were passed very easily and from memory the most voted against was less than 100,000 shares.

[roomey] 07/2/2008 00:42

why was resolution 6 included when co. is buying in its own shares obviously resolution 6 and 7 linked

[the diviner] 06/2/2008 10:46

As far as I can tell the full list of resolutions was to be;

Resolution number 1
The directors must present to shareholders the report of the directors and the accounts for the Company for the financial year ended 30 September 2006. That report and those accounts, and the report of the Company's auditors on those accounts, are set out on pages 7 to 27 of this document.

Resolution number 2
At each annual general meeting, one third of the directors of the Company for the time being (other than those appointed since the last annual general meeting) are required to retire. If the number of relevant directors is not a multiple of three, the number nearest to but not greater than one third of the directors are required to retire. If in any year there is only one director subject to retirement, that director will retire. At this annual general meeting, Mr Johan Claesson is the only director subject to retirement by rotation. Resolution number 2 proposes the re-election of Mr Claesson.

Resolution number 3
Mr Peter Gyllenhammar was appointed as a director during the year and, in accordance with the articles of association, is required to retire and offer himself for election if he so wishes. Resolution number 3 proposes the election of Mr Gyllenhammar.

Resolution number 4
The auditors of the Company must be re-appointed at each meeting at which accounts are presented. Resolution 4 proposes the re-appointment of EDO Stoy Hayward LLP. The resolution also follows past practice in giving the directors authority to agree the remuneration to be paid to the auditors.

Resolution number 5
The directors are seeking authority to enable the Company to purchase ordinary shares in the capital of the Company by utilising some of the Company's available distributable profits. The directors will effect purchases under this authority, if granted, where to do so would improve the Company's earnings per share and would be in the best interests of shareholders generally. The authority would allow purchases of up 4,825,000 ordinary shares, being 13.8 per cent of the Company's ordinary share capital in issue as at 18 December 2007, at a minimum price per ordinary share of 5 pence and a maximum price per ordinary share of no more than 5 per cent above the average of the middle market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which any purchases are made. This authority expires at the conclusion of the next annual general meeting of the Company or 15 months from the date of passing of the resolution, whichever is the earlier.
Companies legislation now enables certain quoted companies to hold shares in treasury, as an alternative to cancelling them, following a purchase of own shares. Shares held in treasury may be subsequently cancelled, sold for cash or used to satisfy share options and share awards under employee share schemes. Accordingly, if the directors exercise this authority to purchase ordinary shares, the Company will have the option of holding those ordinary shares in treasury.

Resolution number 6
The directors are seeking authority to allot relevant securities up to an aggregate nominal amount of £1,257,000, being an amount which represents approximately 33.3 per cent of the Company's current issued share capital (ignoring treasury shares). It is not the directors' current intention to allot relevant securities pursuant to this resolution. This authority expires at the conclusion of the next annual general meeting of the Company or 15 months from the date of passing of the resolution, whichever is the earlier.

Resolution number 7
This resolution disapplies the statutory pre-emption rights which would otherwise apply on an issue of shares for cash pursuant to a rights issue where the securities attributable to the interests of all shareholders are proportionate (as nearly as may be) to the number of shares held and generally up to a further nominal amount of £209,000, being approximately 5 per cent of the Company's current issued share capital (including treasury shares). This disapplication of the statutory pre-emption rights expires at the conclusion of the next annual general meeting of the Company or 15 months from the date of passing of the resolution, whichever is the earlier. This authority also covers the sale of treasury shares for cash.

Regards,
TD

[the diviner] 06/2/2008 10:43

poacher45 - 3 Feb'08 - 18:16 - 805 of 815

3. The directors could make a low offer for Leeds Group but the company solictor confirmed that they would not be allowed to vote their shares in favour. In fact Mr. P. Gyllenhammar said that he was very much against this new AIM practise where shareholders were not given equal rights especially in the case of rights issues.




I suspect that this bit refers to the tendency to disapply pre-exemption rights, which is all too common and can dilute small shareholders.

Since PG stated at the meeting that he was against this practice, why was resolution 7 included in the resolutions that were to be voted upon at the meeting.

From the annual report;
Resolution number 7
This resolution disapplies the statutory pre-emption rights which would otherwise apply on an issue of shares for cash pursuant to a rights issue where the securities attributable to the interests of all shareholders are proportionate (as nearly as may be) to the number of shares held and generally up to a further nominal amount of £209,000, being approximately 5 per cent of the Company's current issued share capital (including treasury shares). This disapplication of the statutory pre-emption rights expires at the conclusion of the next annual general meeting of the Company or 15 months from the date of passing of the resolution, whichever is the earlier. This authority also covers the sale of treasury shares for cash.

FWIW, I voted against resolution 7 by post but because of nominee, I suspect that many would not have realised that it was there.

Were all the resolutions, (including resolution 7), passed at the meeting?

[jonak] 05/2/2008 20:55

Poacher thanks very much indeed for your posts on the AGM, much appreciated !

I read a bit about the land issue when the council appropriated it; the basis for the appropriation was (in common language) common useage as public land, as evidenced by a several people who said they had flown kites, plated football or walked dogs, etc on the land. Who knows which way it will go in the house of lords....the background legal principle is akin to squatters rights, but in this case, it seems the local ruling would create a precedant that allowing public access to privately owned land can result in it being taken from you ! A bit like if someone steals your car often enough they get to keep it ?

[arthur_lame_stocks] 05/2/2008 18:40

You seem quite positive about the way things are going poacher, is that the impression that you got from the AGM?

That 5 acres could be worth another couple of million quid if they can ever get the council decision overturned and get pp on it.

[bracke] 05/2/2008 11:35

poacher45

Interesting posts but if you work on the premise that the market is designed to take money from you rather than to give it to you your example makes sense.

[poacher45] 04/2/2008 14:02

The losers in this example are all the shareholders that have not had the opportunity to apply for the rights issue. Ten years ago this would not have happened. It is outlawed even in America but over here it is permitted on the AIM market only. I think it is totally wrong and unjust but I have to admit at AGMS some other shareholders have not shared my views.

[poacher45] 04/2/2008 13:54

It is difficult enough to pick a growth share without extra expenses being incurred along the way. For example lets call our imaginery company moondust. Firstly you check its growth, profits record, expenses, directors pay, etc. Everything looks good the share price is 56-58p. You end up paying 58p. Three months later the share price is 62-64p. You are happy things still look good. Moondust announces that it is taking over a competitor and will need to issue 25% more new shares to fund this takeover. Although you did not want to invest more at a new price of 50p for the rights issue you would have been only to happy to invest. You then discover that only directors and institutions are allowed to apply for these rights. The excuse being we have all these small shareholders and the cost in administration and postage justs makes it uneconomical. The shareprice then drops back to 55-57p to cover the rights effect. Moondust is still doing well articles in the press etc. However you notice lots of small buys which are being nullified by institutions selling 100000 lots at 55p therefore making almost 10% with having had no costs to pay for the initial shares. You are therefore stuffed.

[bracke] 04/2/2008 12:05

poacher45

Thank you for your AGM report. It was good of you to do so.

[the diviner] 04/2/2008 08:21

Many thanks poacher45.

[gromley] 03/2/2008 22:49

Thanks also from me Poacher - much appreciate the input.

Like Valhamos I don't really have any complaints about the way the company is run although I sometimes which the communication with shareholders was a little better and to this end would tend to support any move for a truly independent non-exec.

Back to you report though point 3 :

In fact Mr. P. Gyllenhammar said that he was very much against this new AIM practise where shareholders were not given equal rights especially in the case of rights issues.

Could you clarify what the "new AIM practise" refered to was and who Mr Gyllenhammar thought was being disadvantaged?

Best,

gromley

[valhamos] 03/2/2008 19:09

Thanks poacher. It all seems very plausible. I've got no real issues with the way the company is being run.

[poacher45] 03/2/2008 18:48

6.They said that when Hemmers-Itex was put up for sale the offers were very very low. They feel that was because they rely very heavily on Jorg Hemmers. Now that they have cherry picked the competitors staff this will give them a bigger turnover and a stronger management team. Also they have not had to pay anyhing for the competitor.
I personally feel that they have reduced costs and taken very reasonable salaries which is more than you can say for the previous directors. I hope they succeed.

[poacher45] 03/2/2008 18:16

3. The directors could make a low offer for Leeds Group but the company solictor confirmed that they would not be allowed to vote their shares in favour. In fact Mr. P. Gyllenhammar said that he was very much against this new AIM practise where shareholders were not given equal rights especially in the case of rights issues.
4, As regards the cash the company holds Mr. J. Claesson said he thought it was good that they had not used it in the last year because company values had dropped so much. If the right opportunity came along they would only be too happy to do a deal.
5. They do not seem very keen on dividends probably because of taxation. However they are only too happy to buy the shares back and pointed out that they have spent £735000 in the last year. So if you add that to the cost of the new factory the investment is getting on for £3.5million.

[poacher45] 03/2/2008 16:17

I attended the AGM last week. The worst attendance over the last 6 years. However even I nearly turned back after the road was blocked by falling branches.Here are the main points:-
1. Existing factory rented. New factory is being built on a plot of land next to the existing factory. The freehold cost at a few hundred thousand is included in the cost of 1.85million. The new factory will be about 50% of the size of the old factory. It will not be just a warehouse as the fabric design side will be housed there as well. They want to grow the business to twice the size it is now. Unfortunately they cannot say how long that will take because they have not given a forcast to the stockexchange. With extra cash flow needed you can say this is a 2.7 million investment.
2. Leeds Group have taken an action out against Leeds City Council over the freehold title of the 5 acres of land at the Scott & Rhodes factory site. This will not be heard until November but it is likely to be influenced by a similar case coming to the House of Lords in the next couple of months. This is too valuble not to try to win.

[the diviner] 02/2/2008 15:16

I was not able to go to the AGM.

Did any LDSG Shareholders attend the AGM ?

[cg1953] 31/1/2008 09:30

all who are attending todays AGM
give em hell; they deserve nothing less.
if the police are called to restore order; so much the better.

[jonak] 29/1/2008 20:21

for what its worth, I'd support you guys, but I hold only 5834 shares

[poacher45] 28/1/2008 16:09

The Diviner
If only life was that simple. In 2004 or 2005 I proposed on this board that everybody voted against the re-election of the chairman Bill Cram. He was overpaid and had made some terrible decisions. From memory fewer than 250000 votes voted with me against Bill Cram. I gave him a hard time during the meetings question and answer session. Afterwards a shareholder approached Bill Cram and said that I was only trying to get on the bandwagon created by the Marconi shareholders at there EGM and he should ignore my comments. Imagine my surprise when Bill Cram turned on the shareholder and told him I was entitled to my view. I would like to think Bill Cram knew he had failed because he resigned within the next year. I was however at the Lupus EGM when the institutions banded together and threw all the directors off the board. I think that unless the directors do something really bad and mostly by then it is to late shareholders cannot be bothered to vote or just dont care.

[the diviner] 28/1/2008 02:45

If an independent NED was to be proposed by small shareholders because it is now less than 7 days before the meeting, it could be thrown out at the AGM, (if the directors did not back it).

It should have been proposed between 7 and 28 days before the meeting. (That is why I raised the subject in December).

The LDGS Articles of Association can now be found on the LDGS Website and section 110 deals with the appointment of directors.



If proper notice had been given and small shareholders had proposed an independent NED, the present directors may well have backed it. It may not have succeeded but I suspect that it is likely that neither Johan Claesson or Peter Gyllenhammar would have voted against an independent NED and they may even have supported such a nomination as a sign of good faith. (If they did oppose the appointment of an independent NED who was nominated by small investors and they later acted in a way that was close to the rule limits it would be easier to question their actions).

[the diviner] 28/1/2008 01:02

I hold 70,000 shares.

[roomey] 25/1/2008 19:00

Arthur Ewen Wigley was appointed to the board to represent P G from memory so no real surprise we really need some independance on the board how much support is there just on this board holding wise could we exert some influence as one unit my personnal holding 200,000