agm summary

Here is my notes from the AGM. I am even more happy after the AGM, I increased my holding by 30% today.

Only Brett Pointon and Douglas Wong spoke. Brett has helped me to see an even brighter future for OAK. Douglas didn't speak much...but looked smart if nothing else.

Brett -

- We'll have a credit raising announcement "very soon". I am guessing an announcement within 1-2 weeks.
- The low SP is due to financial uncertainty by shareholders.
- Dividends are expected to be re-instated next financial year. I guess that means between 7 and 18 months away.

The company has been majorly improved in the past 18 months.
- Improved the conversion rate of enquiries from 35% to 80%! Through centralized reservations sales with trained salesman.
- Evaluated employees. Fired 80% of managers because they were underperforming. Hired new managers with good personality traits and trained them with hotel management skills. Allegedly it's having positive impact.
- Allegedly customer satisfaction has improved from ~80% to ~99% (Brett estimates).

Core operations.
- Excluding one-offs like 2009 rent discounts, core operations profit is +41%. The figures are really solid when you exclude one-offs. I really like these figures.
- July-Nov 2010 NPAT is $4m versus July-Nov 2009 NPAT of $1.6m. (solid figures again)

Global performance.
- Aussie markets from 2009-2010 grew from $12m to $17m profit.
- Dubai loss 2009-2010 grew to -$1.6m from -$0.7m. Although 2009 had no rent cost (onn-off incentive), 2010 had rent cost. I forget the rent amount in 2010, maybe $2m or $4m.

Dubai.
- We can expect a legal decision in November about rent amount.
- The dispute is about rent because the supplier under-delivered on the Dubai property. The precinct is (crap) compared to their initial promises. OAK therefor want rent discount.
- Brett has learned a lesson and likely won't make a similar mistake again.
- Maybe the expenses in Dubai will continue for 2 more years. But at least it's just $1.5m (guessing) of $33m operating profit.
- Dubai is written down as $6m of assets on the books. A complete write-off would be just $6m.
- There are talks about selling Dubai, maybe an offer.

Past 18 months.
- Debt was $110m with a goal of $60-70m without diluting shareholders or decreasing EBITDA.
- Nov 2010 we have debt of $77m. Getting close to the goal.
- Paying down debt at a rate of $1m per month.
- Financial ratios are improving each month: EBITDA/Interest and Debt/EBITDA.
- Maybe they'll raise $8.5m. I'm unsure if I heard this part correctly.
- We are close to keeping the bankers happy, just a little more debt management/reduction.

The primary goal is to manage debt further, ASAP.

NTA including buildings and furniture is $130m (not written in books). Selling a mature property can release a lot of equity, compared to capital raising with an undervalued share price. Maybe then they could buy immature property for lower price after that.

Brett is happy. I am happy. Brett sees a good short term outlook.

Proxy votes -
Remuneration: 6m for, 16m against!
I heard the directors talking amongst themselves and they were surprised to get even 6m votes for the remuneration policy. Maybe it was unfair, or maybe they expected shareholders to be unhappy after the falling SP.