Johannesburg - Directors' remuneration and the time expected of The Times newspaper to claw itself into profit figured high at media group Avusa's maiden annual general meeting on Monday.
Shareholder activist, Theo Botha, also criticised Avusa CEO Prakash Desai's claim that the group had reported "commendable" year-end results.
"If all of your divisions made less profit than they did the year before, how do you call that commendable?" said Botha.
Avusa's media division reported a R252m profit compared to R283m in the comparable period, while its retail division posted a R79m profit compared to R87m in 2008.
Its entertainment unit reported a R5m profit compared to R24m the year previously, while its profit from books and maps dropped to R83m from R109m.
Avusa, formerly Johnnic Communications, listed on the JSE at the end of March 2008. It reported a 29% increase in headline earnings per share of 239c from 185c previously.
Desai defended his statement by comparing the business to cricket. "You look at the overall score, not each and every shot you played," he said.
"I benchmarked our performance against the results our competitors reported. So yes, I think Avusa's results were commendable," Desai said.
Remuneration
Botha quizzed the lack of comparative figures in Avusa's year-end financial statements that would have enabled an easier comparison of executive director bonuses year-on-year.
"I think it is important that the company discloses [to shareholders] the difference between their 2008 bonuses and 2009's. Something the company deemed unnecessary," he said.
Dods Brand, an independent non-executive director at Avusa, said: "Bonuses were deliberated on by the remuneration committee and approved by the board. These amounts were in line with the level of performance put in by both directors."
Botha also asked the board to explain why Desai was allowed to be coaxed to the company with a R1.5m retention bonus.
"Will the company be setting a precedent with this fee?" asked Botha. Said Avusa's Brand: "No Mr Botha, we are not: it will be subject to review in five years' time."
Botha also pointed out that Mark Wilcox, an Avusa director, had been "missing in action" at many of the company's board meetings. "Wilcox is not fulfilling his role," Botha said.
Tom Wixley, an independent non-executive director said: "This is a factor that has been brought to the board's attention."
The Times
Botha specifically questioned Desai on when Avusa's digital strategy of The Times would make a profit.
The Times newspaper and website were launched in 2007 as a "two-prong strategy" into multimedia and the retail advertising pie. It had cost Avusa hundreds of millions of rands to prop up the investment to date.
Botha held up a copy of the The Times newspaper, asking where the front page advertising was.
Although The Times posted a 132% growth in revenue, it still posted a loss of R25m for 2009 compared to a loss of R39m in 2008.
Desai defended the investment: "The Times has performed in line with our expectations. It has increased retail advertising by 40% since last year.
"We give our print media three to seven years to get into profitability. We expect The Times to break even in three years' time."
"The jury will remain out on The Times over the next three years but to date we have been very satisfied with its performance," Desai said.
- Fin24.com