Category Archives: SWAG

Unga Holdings 2016 AGM

The Unga Group had its 2016 AGM at the Intercontinental Hotel today. Revenue and profit were up, but profit was down compared to 2015 which has been boosted by the sale of a Bullpak subsidiary.

In comments at the AGM,  the Unga chairman and MD spoke on various issues such as changing food patterns as seen in new products that they are adding to reach consumers and farmer segments, more technology being deployed in agriculture and the rise of young agri-preneurs  who may be one day disrupt the food chain, difficulty obtaining quality maize, difficulties with getting timely payments from Nakumatt, and overall as slow down in the economy as seen in lower buying power for their products and a tightening of credit at banks.

Ahead of the usual votes to approve the accounts, directors re-election, dividend (Kshs 1/= share)  and re-naming of the company to Unga PLC (as per the 2015 companies act), the shareholders Q&A was the main part of the AGM.unga-2016-agm

Excerpts

  • Dividends & Bonus: Why no bonus after the Bullpak sale? The money from Bullpak went to buy Ennsvalley Bakery (and shareholders had approved it)
  • Product reach: Unga is a national brand, that’s sold mainly in supermarkets, but are not in every part of the country. They are seeing challenges with buyers affording products and will introduce smaller packs of some products to remain affordable and within reach of consumers.
  • Gift items: One shareholder asked for Unga shopping vouchers instead of lunch, and when the Chairman announced that there was a product pack to go with lunch, this got a cheer from the many shareholders, but the very next question was for t-shirts to market the company.
  •                                                                                                                                                                                                                                          The Chairman said they had made changes based on requests at past AGM’s but that she would endeavor to one day to have everything shareholders wanted – dividends , t-shirt, lunch, and product pack.

Tablet for Business Tales: Part I

How do you introduce someone who’s watched the new world of tablets, launched with the first iPad, go by very rapidly and evolve into many stronger models three years later – and who does not believe in them? Very gently…!

Despite the prevalence of iPads and other tablets at conferences, on the TV news, and even around Nairobi,  I still have not met anyone, other than @Wanyama, who uses a tablet productively as their main business device.

I recently got a generous offer to review the Samsung Galaxy Note 8.0 (Model GT-N5100) from Samsung Kenya after the recent 2013 Kenyan Blog Awards in which Samsung was a sponsor.

The first order of business was to get a SIM card, and that was at Safaricom who also cut the card down to micro-SIM size with a special stapler. It’s also very easy to switch the Note from Safaricom, to a Wi-Fi when you find a signal, and save on some money. I also bought a Micro SD card, but when it came to getting a hard shell/case for the Note that took a bit longer. I went to several shops, who all had a variety of 7″ and 10″ cases, and this is a new size in the market at 8″ (the Note is aimed at Apple’s new iPad mini), but eventually, I found one at Fone Express.

Need to invest in larger Suit Jacket pockets

Another challenge was portability of the Note. It does not seem to fit in many jacket pockets, but larger pockets are something one should request from a tailor when ordering a suit in the future!

Tablet’s are about apps, and there is a Google Play Store and a separate Samsung Store that I’ve not really tried. In the first month, from the Google one, I downloaded several apps I was familiar with such as:

– Evernote (great when you take notes on different devices like laptop’s or mobile phone and sync) and Adobe Reader

– Waze, Ma3Route and Ushahidi for Nairobi traffic updates

– Skype for communications

– The New York Times, Bloomberg, the Financial Times and the Wall Street Journal for news

– DSTV to see programming highlights

– Tried out several simple farming applications to track farm inputs and sales.

Road Bump: Swype is a nifty program that makes typing faster in touch screen devices. It costs $0.99 and I was able to buy it from the Google store (which also prices paid apps in Kenya Shillings) after I added my credit card details. However, when I uploaded Swype, I found that I could not access the tablet as there was no keyboard to Swype/type in my access password on the top screen.

I spent a few days going back and forth with the Swype (online) and then Samsung (in Nairobi) teams without success and I had no choice but to go for the most radical option – which was to wipe out the tablet.  This seems to be a common issue in the tablet world in which people are constantly adding and deleting apps, some of which don’t work properly, or compromise all devices.

There were quite a few guides online and videos on YouTube showing the simple commands to reset it to factory mode – and fortunately, it worked! Within a few minutes, the tablet was back to life, and once I got online, the previously downloaded apps were ready to re-install including Swype, which I’ve re-added, without incurring an additional charge.

So far the Note is growing on me. It’s nice and easy to use for taking notes at meetings, where I previously used to carry around a laptop. With a hard case, and larger jackets, let’s see where how far this can go.

Kenya Airways 2009 AGM

Kenya Airways (KQ) is the cradle of blogging for me – one of their annual general meeting’s (AGM) is the place it all started, the place where the inspiration for blogging, since then it’s been a ritual to attend because I like planes and investments similarly. This year’s AGM, held on September 25, was the first I’ve attended at Kasarani sports gymnasium; previous ones were at their Embakasi HQ, Carnivore and Bomas grounds.

What was remarkable or noteworthy?

shareholders aplenty KQ always draws in shareholders, maybe its because they are rather generous with gifts a.k.a SWAG (more on that later); but the meeting hall is full of the whole rainbow of Kenyan shareholders from business peoples, to student types (perhaps sent as proxies), but mainly older people who perhaps bought shares as far back as the IPO in 1997.

KQ courtesy shames Safaricom a few weeks ago Safaricom held a no-frills AGM that did away with many of the niceties that shareholders are used to. KQ, showed they this was no a costly affair to gold; they had shuttle buses from town to ferry shareholders to and from the meeting and also gave out lunch boxes to all shareholders. The AGM did not have the usual red t-shirt that shareholders are used to, but coming on the back of Safaricom, many were satisfied.

in the meeting – CEO Titus Naikuni talked about the tough year the airline had from the credit crunch, which affected travel budgets and the price of fuel, which escalated during the year.

– Fuel hedging: FD Alex Mbugua tried to explain the subject of fuel hedging, something he said even many accountants don’t understand, but which had left the company with a 5.6 billion loss. The company was able to manage an operating profit of 4 billion ($52 million) before hedging kicked in, even though the price of fuel had gone up to Kshs. 24.5 billion representing 35% of their total costs.
– For the last 5 years they have engaged in fuel hedging, this worked in their favour till 2008 – when with oil looking to zoom past $200 they locked in some contracts, only for the price to nose dive to $40. Overall, in the five years the gains remain a positive Kshs. 516 million.

In response to shareholder questions, he also said: 
– KQ board is reviewing hedging policy, and this is through the committee of the board
– some hedging parties have been reluctant to enter into contracts with KQ of late, and insist on some cash cover
– while they could not comment on recent prices they have hedged, some to 2011, he mentioned the numbers have swung in their way as at August and they may have a write back in profits this year when they brief investors in October 2009.

Shareholder questions (with answers)
– how will they control costs? Careful choice of routes, try and expand those that work, drop those that don’t. African routes account for almost 1/2 their revenue now.
– Why did employees strike? There were conflicting unions representing employees, and during labour talks, the employees went on an illegal strike as they demanded untenable wage increments. Management was able to come to an agreement with the help of COTU and is looking to learn from mistakes it may have made to avoid this again
– Why is the company’s Secretary (CS) not an employee? The Company did a cost-benefit analysis and decided to outsource the function. The CS is still Fiona Fox and she assured shareholders that she responds to all letters written to her; most of which relate to registrar matters
– Where are reports of KQ accidents in Ivory Coast and Cameroon? CEO said investigator reports are still being done by these countries authorities, and they don’t have the former, while the latter has not been released KQ so can’t comment on it. On the Cameroon crash, KQ and insurers had made a settlement with 90 of the 105 passengers, but some relatives have chosen to sue the airline or the aircraft manufacturer (i.e. Boeing)
– Why did the annual report come out just 3 weeks to AGM? Management said they would try and improve and not just comply with the legal minimum for listed companies
– Why not use Precision Air aircraft (a Tanzanian airline in which KQ owns 49%) to fly to Kisumu since they have no more turbo-props for short runway? The repairs at Kisumu are short term did not warrant a fleet change, and will resume flying there with their Embraer 170’s when repairs are done
– Do they plan to fly to the USA? KQ has never said they would fly to US; they have good partnerships and networks (KLM) through which they get feeds from US already, and JKIA will have to make some modifications before they can fly to US.

source: airliners.net

– What will be done about Boeing 787 which they have ordered but us yet to fly? KQ are talking to Airbus and Boeing about getting some replacement aircraft (won’t be brand new) but a decision will be made in a few months.
– One shareholder asked why managers /directors interest are divergent from KQ i.e. directors own few shares, while executive directors compensation is a significant part of employee compensation: The Chairman said buying KQ shares was a personal decision of directors and he himself bought his shares at the time of IPO when he was not even a director of KQ. The CEO said management has not had any salary increments despite what union said during the strike.

Minor #FAIL’s: – The company registrars who had dozens of computers to register shareholder before the meeting, but whose computers were not connected. Anyone could have walked in. They also ran out of ballot papers
– The gymnasium had no water (though understandable at this time of water rationing). It was also not suited to the meeting format; the directors sat so far as to be indistinguishable except on TV screens while poor microphones/acoustics of hall meant some questions/comments were not audible
– Shareholder elections; this year, there was only one independent candidate on the ballot I guess they have realized of the futility of this exercise – and the results out today show all the board nominated directors were unanimously re-elected.
– CDSC (the share people): had a tent outside to register any of the 78,000 shareholders of the company; but they didn’t just ask if you had immobilized your shares, they practically demanded you pass by their tent and register to receive statements by e-mail or SMS (do away with the postal service)

Goodies: – Dividend of 1 shilling ($0.013) per share despite the loss. shareholder’s register closed day of meeting and this will be paid after October 23
– Lunch box by Sarova with drinks (yoghurt, soda & water), meats (drum stick, beef sandwich, boiled egg), fruits (banana, apple), and bread.

No SWAG from Safaricom

There will be no SWAG from Safaricom at their annual general meeting that will be held on August 19 – so the company boldly proclaimed in a media briefing on Wednesday.

Even while projecting that just 30,000 of their 830,000 shareholders to turn up, the company budgeted a total Kshs. 352 million (~$4.5 million for the event) which they cite as being too expensive. They even have compared the cost of the day’s events to be the equivalent to one month of all their leases, of 1 ½ months worth of administrative expenses – all channeled to a one day event!

Yet two things are clear:

1. Much of the burden is regulatory: They estimate it will cost Kshs. 240 million to print and circulate an annual report (Co-Op Bank, the most recent listed company has a 150-page report). Dividend will be distributed to shareholders, and they estimate that it would Kshs. 73 million to send these by EFT to a fraction of investors. Truth is most dividends and paid by cheque, very few by EFT.

2. SWAG generosity is not that expensive (but these are tough times): Kshs. 40 million for shirts, lunch, caps, and umbrellas is not much money for the company to spend, even if they don’t provide transport to the venue (about 10 kilometers from town). However, these are cost-cutting times even at the largest companies. A few years ago, Nation Media Group (NMG) would hire buses to take their shareholders to their Nation AGM at their premises (beyond Jomo Kenyatta Airport) where they’d would have lunch and get some SWAG items. This year’s event was at KICC in the middle of town (no transport costs) and shareholders only got copies of newspapers with their buffet lunch.

For Safaricom to take a harsh stance on SWAG is rather cold unless the directors and manager also adopt a similarly Spartan lifestyle e.g. no water for directors at the meeting and no breakfast /giveaways for media and institutional investors when they announce quarterly results. Still I expect a few thousand shareholders to turn up, not believing that there will be no SWAG

Hi-Tech Cost Cutting: Safaricom is combating the high cost of annual general meetings and investor relations through technology

1. Annual reports will be downloaded from their website, which is probably the best in Kenya among NSE listed firms in terms of communicating with shareholders. It is updated constantly, even on the same day with CEO briefs to media and institutional investors.

2. Use M-Pesa to pay dividend. Odds are that most of their local 830,000 shareholders are also their (13 million +) customers; many will not have bought shares since the IPO – meaning their dividend cheques are perhaps just 20 shillings $0.25), so by employing M-pesa this will be a much cheaper channel than cutting and posting cheques for such small amounts.

The logistics of doing this are quite significant, it will involve partnering with the company registrar, perhaps the central depository settlement corporation (CDSC), and M-Pesa agents, to ensure each person gets their 10% dividend payment in the correct formula (a reversal will be a nightmare). Once this is done it will be an eye-opener for some of the other companies with large shareholder bases +50,000 including Kengen, KCB , Kenya Re, Mumias, Co-operative Bank and Kenya Airways who had a their loss-making year in a decade.

Other Development: The media release media release (PDF) also mentioned two recent developments at Safaricom:

1. Investor road show where they visited institutional and fund investors and talked in detail about the company in London (T Rowe Price, Genesis Investment, Charlemagne Capital, Marshall Wace, Renaissance Investment, Eton Park Capital, JP Morgan Chase, Aberdeen Asset, Henderson Global, ROBECO Group, Cyrte ), New York (EMS Capital, DWS Scudder, Morgan Stanley, Galleon Partners, McKinley Capital, Harding Loevner, Goodman), Boston (State Street, Wellington, Fortis ), Johannesburg (Stanlib, RMB, Visio) and Cape Town (Investec, Allan Gray, Coronation, Fairtree).

2. Their investment with Jamii Telecom which will include partnering in use of fibre in metro areas , and resale of excess capacity on TEAMS and Seacom, among others.

Read also ratio magazine Dont Come to Safaricom for Lunch post

SWAG Like Us

Thursday and Friday have seen a series of company annual general meetings (AGM’s) for their shareholders. Thursday had Standard Chartered, and Nation media group, while Friday had Co-operative Bank, Diamond Trust, CFC Bank, and Scangroup.

With over 50 listed companies, why some days become so popular is a mystery; calendars can be spread out by the capital markets authority. It has been difficult for media and investors to keep up with this; media houses will perhaps give coverage to only one event (e.g. Nation mainly featured their own AGM), while a common lament of shareholders has been there are 365 days a year, how do these companies all pick on one day to have five different meetings?

Investors want SWAG: An excellent series of (3) articles on investor relations (IR) management in East Africa notes that retail investors are often there (at AGM’s) for the free lunch, not for company information.

And how do investors deal with the challenges posed these last two days?
– try and attend every AGM
– Dashing back and forth to attend all, spend as much time as it takes to get SWAG
– Send a friend or relative as a proxy to get SWAG while they do the same at another meeting

What is SWAG? The urban dictionary gives the best definition of SWAG which can be

promotional merchandise for a band, record label, or other entity in the music business, usually distributed at concerts. May include t-shirts, stickers, promo CDs, posters, etc. Often free, but not necessarily; a t-shirt or record purchased at a concert might still be considered swag, especially if it is a design or release that is not readily available in the mass market. The chief difference between swag and regular merchandise is that its purpose is not to make a profit, but to promote the band/label, and reward its supporters by giving them something cool and unique
Or
Stuff/Sh*t We All Get – Relating to the trade show convention industry, where exhibitors hand out “free stuff” to visitors. Most of the time these items are purely promotional materials, and are fairly worthless. i.e. pencils, mugs, and mouse pads. SWAG always has the company name, logo, slogan, product, service, and contact information clearly printed somewhere on the item/s

So SWAG is why many investors attend corporate annual general meetings. Don’t believe that institutional investors and media attendees are immune to the lure of SWAG – they also get their own SWAG, often the same stuff (meals & promotional items) but at different more respectable venues.

Why SWAG?: Companies should not lament SWAG as being expensive items that are the price of being a listed company that has to satisfy hungry shareholders. A shareholder has to show up (or send a proxy a.k.a authorized representative) to get some SWAG.

Attendees have to show up to get SWAG, those who are not in attendance or represented don’t get any except the dividend which all shareholders get, but according to the number of shares they own. For many shareholders, their SWAG is much more than the dividend that their shareholding entitles them to

For the guest It is also a universally African concept to honour your guests with a meal.
For the host And for the company giving out SWAG this can be vital to the orderly and delicate flow of a company’s annual general meeting. Also, in marketing terms, a well designed, durable and branded cap, travel bag, t-shirt or umbrella, will be used to market the company for years to come in faraway parts of the country where even the company’s products are not sold, and long after the shareholder has sold their shares.

SWAG Costs: While the costs of SWAG items (from vendors like Vajas and San Valencia) has not increased by much, the number of shareholders seeking SWAG appears to have gone up significantly in these tough economic times. many show up for SWAG and don’t even enter the meeting hall and some companies acknowledge this by handing out SWAG before the meeting starts. And therefore the cost of hosting an annual general; meeting has gone up Safariom with 800,000 shareholders is probably contemplating the SWAG question for its annual general meeting set for august 19.

How can they minimize the cost of SWAG?
– have a meeting at a remote venue and hope few show up for it
– publicly announce that they are not going to be giving out any SWAG. But tough to do when well paid directors and executives are announcing billions in profits
– be stingy with the SWAG (Yesterday, the Nation Media Group gave out copies of their newspapers (Daily Nation, Taifa Leo, Business Daily and East African) along with a buffet lunch, while a few years ago they gave out gym bags & polo shirts with lunch and transport to the venue)

What’s your opinion of SWAG?