Judging by many of the posts on this thread, it is clear that many people buy shares in companies without performing even the minimal required amount of research.
These performance shares were issued almost three years ago, and they - along with other classes of performance shares - have been referenced in numerous Appendix 2A statements published over the past few years, and their terms have been laid out in detail in every financial report (Interim, and Annual, Report).
So that people become outraged when they learn of the vesting of those performance shares, is nothing short of extraordinary.
A veritable case of not doing one's homework, and then when ultimately coming across information - which was always freely available in the official company announcements - getting angry at the company and its managers because of it.
What's worse, getting angry without actually understanding whythose performance shares are vesting.
In this case it is because the business that KTD acquired in 2018 (for which those performance shares formed part of the purchase consideration), namely Keytone Enterprises (i.e., the original New Zealand business) is meeting performance milestones agreed to at the time of its purchase, milestones for which the performance shares are now being issued as deferred consideration.
At the time of purchase, the acquisition could have:
- been paid out fully up-front, without any further performance hurdles,
or, as was the case:
- a proportion of the purchase price, represented by a pre-determined number of shares, could have been withheld; and issued only when the acquired business met certain performance milestones.
I know which one most people prefer, by far.
And yet you have people bleating about it.
Incidentally, it warrants looking at what is happening to the Revenues of the acquired business in question, which has caused those performance shares to vest:
FY2018: $2.021m
FY2019: $2.504m
FY2020: $5.026m
FY2021: NZ$6m
So, at the time of the purchase of the NZ business, it was doing Sales of some $2m.
The agreement at the time was effectively for an extra 16.5m shares to be issued to the vendors (worth some $3.3m at todays' share price) if the Revenue trebled over the next 3 years. Which it has done.
Personally, as a shareholder concerned about underlying business performance (as opposed to short-term share price movements), I am very happy to see these additional shares vest.
In fact, my fervent wish is that the remaining 103m performance shares also vest!
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