AGMs, at their best, are a bit like Opening Meets. People who haven’t seen each other since last season reconvene over a sandwich and a glass (or two) of wine. You don’t need to be mounted for either.
On Friday I went to the AGM of plantation group MP Evans at the Worshipful Company of Tallow Chandlers’ Hall. It was attended by many familiar faces – long term shareholders like me. I have been a shareholder for more than thirty years and enjoy the chairman’s genial delivery and the appreciation of the share price – oh, and the lunch. FT columnist John Lee professes to be a long term investor but has long since sold his shares. I am not an AGM junkie so I don’t know how many other companies offer their shareholders an opportunity to quiz the management and then enjoy an al fresco luncheon.
This year the AGM marked the retirement of the managing director, the appointment of the CFO in his place and a new non-exec to the board – all very exciting stuff in the dull world of AGMs. Without wanting to get bogged down in detail, the shares are under priced. Should you snap up a few? Probably not, unless you like the fact that they are on AIM and so free of Death Duties – although that’s called something else now. They pay an adequate dividend, you can buy them for not much more than £4 and the company is actually worth between £6 and £9. These estimates came from board members on Friday who are significant shareholders. So why am I putting you off?
I’ll tell you why. The realisation of value in this company will only come if and when it is sold. The only other way that its value will be reflected in the share price is if the substantial family and institutional shareholders loosen their grip on the company. Frankly, why should they. The shares have delivered income and capital growth for decades and will continue to do so. So if you want to tuck something away to help your heirs avoid Death Duties, MP Evans is just the ticket.
Which reminds me, many years ago my grandfather’s broker – nervously – approached this inevitability. He wanted my grandfather to buy Irish government bonds. My aged relative was particularly averse to buying depreciating bits of government paper but they were – still are? – free of the dread DDs. His pitch was perfect; “Lord Bellew, when you’re sitting up there on a damp cloud won’t you be furious to see all that money being wasted on tax”.
Now, may I change the subject. The temporary Serpentine Galleries Summer pavilion is shaping up better than my last post on the subject suggested.
But the (permanent) Albert Memorial is rather better.
I am NOT an ethical investor however, in the interests of journalistic balance, should you not at last mention the nature of M P Evans somewhat controversial business !?
You are right to bring this up. MP Evans is a long time member of the Roundtable on Sustainable Palm Oil and has adopted their principles in relation to environmental, social and ethical plantation practices. New planting is only done in areas not having high conservation value and that have been subject to an independent social-impact assessment. Also development is only undertaken in heavily-degraded areas which are unsuitable habitats for endangered species. No burning is allowed. I believe their standards of environmental and social responsibility set a benchmark for others to emulate.
I failed to mention this because I have grown to take it for granted.