Ann: Strategic Review and CEO Update, page-48

I have not paid much attention to the strategic review, other than to consider it silly, because:

• firms should continually strategise, that's the responsibility of the generously paid top management team; and
• why pay consultants to do the job?

On the recent release to the effect that a few unprofitable outlets are going to be closed, that too is silly. Any half-brain could conclude that if stores were unprofitable, and are unlikely to be profitable, then they should be closed. I have on a few occasions popped into a small TGA outlet at St Marys, Adelaide. It always seemed to have more staff than customers in the shop, and the location seemed wrong for a consumer rental company.

TGA has been poorly managed since it floated. I invested in it on the logic that an 80-year-old rental company would have learned to run such a business, so Management would not have to be super intelligent to continue. Warren Buffett said, “You should invest in a business that even a fool can run, because someday a fool will.” Virtually every TGA initiative failed – Big Brown Box (retail), debt collection, debt factoring and car loans. The commercial leasing was probably working out OK, but that was merely an extension of an old business focused on leasing goods to TAB agencies.

If Somers gets into the box seat, there is a chance that somebody who knows the financial services business would make something of TGA. Somers should have an idea who to hire to fix the company, and at what level of remuneration.