Automotive Holdings hit the ‘first strike’ on Friday after more than 25 percent of its shareholders refused to adopt the remuneration report.
At the Company’s Annual General Meeting held today, Automotive’s 27.62 percent of shareholders voted against the remuneration report which has surpassed the threshold 25 percent needed for a ‘first strike’. The news sent the AHG stock price to fall straight by 6.044% or $0.110 on 23 November 2018.
If the resolution had got the shareholders’ approval, Managing Director Mr. John McConnell would have entitled to receive LTI Performance Rights in his remuneration package for the fiscal year ended 30 June 2018.
But Automotive Board believes that the improvement over the remuneration structure of the Group can better align the interests of all stakeholders, for which the review process has already been started, told the company.
Ahead of holding the 2018 Annual General Meeting, the company today released their trading update for the four months to October 2018 along with full-year FY19 earnings outlook.
In the first four months of Fiscal 2019, the company has reported a lower than anticipated profit with a decline of 45.1% in the operating NPAT of $11.7 million, compared to the previous corresponding period’s NPAT of $21.3 million. This downward shift in profit reflects the increase in interest costs and negative impact on KTM earnings driven by the foreign exchange movement during the reporting period.
A leader in point?of?sale finance and insurance solutions, Automotive Holdings Group Limited (ASX: AHG) now expects its full-year operating NPAT to range within $56?million to $59?million in Fiscal 2019.
Managing director John McConnell stated that due to meltdown in East Coast’s housing market the company had witnessed a softening of entire private buyer market, especially across New South Wales and Victoria.
Mr. McConnell said Automotive’s used car business ‘easyauto123’ is targeting to break even during the fourth quarter of Fiscal 2019 driven by the substantial investments made over the past two years. Resultantly, the easyauto123 business is expected to grow in the seconds half of FY19 leading the group’s earnings to gain momentum ahead of FY19.
The stock price of Automotive Holdings last traded at $1.710 on 23 November 2018 with a PE of 18.570 x and the market capitalization of $603.55 million. Besides today sell-off, the stock has witnessed a massive performance change of -47.40% over the past 12 months.
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