It’s a very good question. In summary, it is fair to say that...

It’s a very good question. In summary, it is fair to say that some of the costs that PGH claimed should reduce, but I think saving the $1.57m pre-tax pa, which they claim, is a big exaggeration, and may include comparing apples and oranges. (It might be right, but I reckon $1m pa pre tax saving would be the upper end of what’s reasonable, without a lot more detail.) The $1.57m was not broken down into the areas of saving and was not independently verified. I posted about this in a very long post as follows

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EGM Noticeand EM-biased and misleading

richardwth 18/05/25 20:28 Post #: 79091895

.. in particular the middle section starting with

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“2.2.3This section on putative cost savings is misleading and/or exaggerated. NB itcompares $1.57m pre-tax saving (which it doesn’t break down per itemlisted, and is not verified by an independent person) with PGH’s $44.9munderlying profit after tax for FY 24. A proper comparison would be for the claimed saving to be stated as $1.1m after tax. I doubt that that misleading comparison was accidental…… etc”

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Some further thoughts about all this:

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At the EGM a shareholder asked, fairly “how is it proposed that delisting will reduce share register costs” [as PGH must still have a share register after delisting]. Answer: there will be a reduction in Computershare fees since it will no longer be charging fees to process ASX trades. RG didn’t specify by how much. Even if there were 20 trades per business day on average after the takeover expired, so 5,000 a year (which looks much too high) I doubt if they would cost more than $2 per trade to process electronically. Thus a guess of $10K pa saving pre tax- although C’share will still charge for processing off market transfers (which probably cost more as they are paper based, not digital). I doubt if this aspect saves even $10K pa pre tax. You can be sure that RG would have said so if it was a big saving.

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RG said that about 50% of “this” is for insurance, audit and listing fees. He did not say “50% of the saving”: that may be an important distinction. A number of these pronouncements- even in writing- border on the misleading and PGH does not go out of its way to ensure clarity of communication- preferring to leave uncertainly and fog aka BS. These are smart people so it is asking a lot to accept that every example of poor info is accidental rather than spin. The saving in insurance costs would- logically- only be for D+O cover. ASX fees are $72,895 pa plus 0.225% of trade values. As a rough, but high, guess assume that 2% pa of the stock is traded, since 9 or 10% of the 12% minority will not sell. Say an average value of 90c per share. On these figures, the fee of 0.225% would be $13,500 on top of the fixed fee of $72,895 pa. It’s true that the ASX fees would stop- but in total the saving should be well under $100K pa pre tax.

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It is likely that being delisted would justify a saving in D+O insurance premium, which is expensive, but impossible for a layman to guess how much. However that saving (on going delisted) should be measured against what the premium was when RG owned 88%, not against when he owned 50%, where the risk exposure for the insurer would have been higher. We don’t know which comparison PGH Board has used.

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I doubt that PGH’s change from a listed to unlisted disclosing entity would save more than $250K pa in audit fees. NB PGH mustinclude ALL the Corporations Act disclosures for a listed co in its 2025 report; it will only be for FY26 and later that it can exclude Rem reports and a few other things.

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The most unjustifiable assertion is that there will be a big saving “due to reduced headcount and salaries on company secretarial, finance and management roles”. This is waffle- they give no figure so it’s impossible to dispute, but it’s hard to see that delisting could save more than 1 FTE person (albeit well qualified and well paid).

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Overall it’s impossible to tell as they didn’t break down the figures: and in future they will not give us the figures to check whether these claims were achieved.

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The big picture is that it unfortunately doesn’t matter. PGH had to say something about the pros and cons of desisting to satisfy ASX and ASIC- and thus minimise the risk of a legal challenge- but as long as they went though the motions and ticked the boxes the detail didn’t matter, if it was not obviously outrageous.

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It would not matter what they said about cost savings or indeed any of the purported benefits of delisting: once the ASX allowed RG to vote his 88% it was clear that PGH would delist irrespective of whether they could convince any shareholders. The EGM was just part of the ASX’s Pontius Pilate act, despite many complaints. In the end no one believed them: 99.7% of the votes (other than RG’s) were against- a stunning message of no confidence in the Board.

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Apologies for another very long post- no more on this topic! - but the Board must know that some shareholders care about rigour, clarity and honesty, even if these ideals are as dreamy as Don Quixote.