I don't know what to think about your comments. I just remember that I got out of what was CMI when the RC debacle was being solved. I re-entered after looking at Ampcontrol (unlisted part of SOL) and Legend. I also thought that Andrew Buckley did a great job of getting rid of the other investments. I thought it was all going to get sold but then when it wasn't I didn't mind MG developing an investment portfolio as I thought that is what I would do if I had cash and wanted a size advantage. I thought that the investments would be defensive. I have no idea what the investments ended up as. What MG did impress me with was his cleaning up of the existing operations - There was a retired GM still helping out and two accounting offices as I recall. I assume he had something to do with that as it had not been done until he became executive Chair.
I don't think that the investment portfolio has done as well as I had expected but then again I notice that Geof Wilson's funds also had a bad year - It was not a stockpicker's market and hasn't been for some time. I had hoped that this Excelsior move was to manage more funds and to provide a boutique fund management arm. It has not worked so it cannot be seen as a success. I think MG did get a good contract out of it but at the same time I thought that CMI was trying to get skills it would have had to pay a lot more for than was worth managing the $22 million that CMI had. I thought that they saw this as a business opportunity otherwise they should just have placed the funds with a manager.
I am concerned by MG's departure but as a shareholder in GC1 I actually think that it was time that he focused on that company. As a shareholder in CMI( ECL) I actually wanted a merger or a sale of the assets. I don't like being half pregnant and as such, I think that I was wrong thinking that keeping the cash made sense - unless you were going to invest it and that, as an operating company, it makes more sense buying another operating company in my opinion. This hasn't happened and now the company seems to have gone "back to the future".
I don't think it's very clear as you suggest why MG left. Firstly CG the other director who had been there for a bit longer than MG resigned a few weeks earlier. If you go back to 2011 and beyond there have been a lot more names of directors - one only staying for just short of 11 months. Go back and look at the past annual reports since 2012 and you will see how many directors have come and gone and one has now returned. Somehow or other they don't seem to stick - so I am not sure what the reason is. It may just be difficult being a director when you have what really constitutes a controlling shareholder at the table - who knows.
I do take your point that there is an element of risk in the electrical business - I do think that these "electrical supplies" are all far more competitive these days. I think ECL has a good base with Minto but unless they have a whole new basket of goodies they are probably limited in opportunity. I hold for the dividend and for the potential for corporate action that's all.
ECL Price at posting:
$1.21 Sentiment: None Disclosure: Held
(20min delay)