Crikey’s Sydney AGM guru, Neal Woolrich, is trying to set the world record for the most double entendres in the one piece with this little effort on the Sharon Austen AGM in Sydney last week.
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Having made my Crikey writing debut with a story on Sexpo, I thought it only fitting that I wind up my AGM contributions with a yarn about the Sharon Austen AGM.
I didn’t expect it to be the most engaging of AGMs, but based on the company’s prospectus, I at least hoped the company’s Annual Report would be good for some eye candy.
A bad case of premature adjudication there the only figures in the Annual Report were of the numerical variety.
Thankfully, Sharon Austen (the company) did not let down those shareholders who trekked in to the AGM, putting the glossy Sharon Austen catalogue on every seat. Not that I’m interested in that sort of thing, mum and dad, if you’ve ignored the terms and conditions and are reading on.
At first glance, Sharon Austen has been a poor performer. It aroused great excitement when it listed and after an early upward thrust to its June 2000 peak of 90 cents, the company’s share price is flaccid at around 11 cents, down almost 80% on its list price of 50 cents.
The company was caught with its pants down at year-end, posting a revealing loss of almost $3.5 million.
Unlike so many dot.com flops, it hasn’t sunk yet, but it will take an industrial-strength dosage of financial Viagra to erect the company’s share price.
And the company has gone through more directors in the past year than a rampaging stud in a stick flick (from what I’ve been told). Four of the company’s six directors resigned during and were replaced in May, leaving only Sharon Austen herself and a non-resident director as board members with more than 7 months at the helm.
(CLARIFICATION: CEO Chris Thorpe has advised us that the change in directors was as a result of the Divolution merger, not as a result of board instability as the above paragraph may suggest.)
Chairman David Haines a former deputy chief censor was upbeat about the company’s prospects, saying that it had now arrested its cash burn, which saw it blow $3.2 million in cash during the year and leaving it with only $2.8 million at year end. He spoke positively about the company’s scrip-for-scrip acquisition of Divolution during the year, a company which licenses adult movies via video, DVD and pay TV.
The company also gave shareholders a press release trumpeting its franchise agreement with Monstermob to provide mobile phone ringtones, logos, SMS messaging and chat services. The company claims to be able to “provide the technical platform and marketing expertise to launch the Monstermob brand in Australia”.
All well and good, but what does this have to do with Sharon Austen’s core business?
To this outside observer, it looks like a desperate attempt to hustle ever-important cash flow from whatever source it can.
CEO Chris Thorpe talked enthusiastically about Australians’ fast take-up of DVD and noted that with multiple angles, zoom capabilities and freeze frame, it was “ideal for our industry”. The company will be hoping that DVD provides the money shot it so desperately needs.
He also spoke about the company’s licence agreement with ACP to produce picturemag.com, which he reported had over 30,000 hits in November. That’s nothing to write home about even Crikey gets more than that!
(CORRECTION: CEO Chris Thorpe has advised us that in fact the site has had 30,000 unique page viewers per month and over 4 million hits. Our apologies for this error.)
Thorpe said he was “confident and pleased with the way the business is now performing” and noted that it was EBITDA neutral in October and likely to be EBITDA positive in 3 months.
While that’s good news, the company had a gorging depreciation and amortisation charge in 2001 of $544,000, well in excess of its gross margin of $365,000.
And while the company has net assets of $10.5 million, the balance sheet is well stacked with $9.3 of its assets being intangibles goodwill ($8.433 million net), video copyright ($777,000 net) and customer databases ($153,000 net). This will give rise to a hefty amortisation charge each year to eat into its profits, and if its investment in Divolution goes limp, any writedown will compound their overall losses.
The few shareholders in attendance had no questions on the accounts, but interestingly when it moved to the other business of the meeting, the majority of proxies (11,500 as opposed to 8,560) voted against the proposal to remove Arthur Andersen as the company’s auditors and replace them with White Iliff. The chairman explained that the latter had been the auditors of Divolution.
On show of hands, however, the motion was unanimously carried by the meeting.
This seems to be a bit of a back-door play, with the take-over target’s auditors replacing those of the company who took it over!
The meeting was done and dusted in a mere 15 minutes I’ve had sexual encounters that have almost lasted that long! (Just joking mum I’m still saving myself for marriage. A bit of artistic licence there for a cheap laugh.)
No doubt punters were in a hurry to get out of there and check out the Sharon Austen catalogue. After the meeting, there was a peculiarly quick mass exodus into the gents.
For purely academic purposes, I perused the catalogue and found some puzzling items indeed:
* “Power drive! Power your pussy” trumpeted one advertisement. What doesn’t a can of Whiskas do the trick? “This purple pleasure pal with two silicone sleeves is extremely compact, well made and it packs a punch of phenomenal pleasure. Perfect for those secret erotic adventures. Quiet enough to use in church.” And why wouldn’t you? Buggered if I could make out what the thing was.
* “Dive into high society with the Sharon Austen Sydney Starlet. Inspired by the Sydney Opera House, this unique women’s vibrator [whatever that is] with shell-like domes is the crcme de la crcme of vibrators, 05Guaranteed to make the fat lady sing.” No idea how that thing helps a fat chick sing and it doesn’t even look a thing like the Opera House!
* There was some Shakespeare fillum which I’m not familiar with not that I’m that well read called “Shakespeare revealed”. The synopsis reads “to romp or not to romp, that is the question.”
* It took until I got to the last page of the catalogue before finding something decent “Rocco Never Dies”, dubbed as a “Schwarzenneger-styled action story” which shows the star in army camouflage greasepaint carrying a damsel in distress out of trouble. Proving that this film has the most deceptive title since “The Never Ending Story”, the sequel also available in Sharon’s catalogue is “Rocco Never Dies: The End”.
This was all too baffling for a simple country boy like me.
Little wonder this company isn’t travelling too well with only two decent flicks in their entire catalogue and some mysterious products to say the least, it will be a long time before this confused customer logs on to Sharon and forks out for her hardware.
Neal Woolrich can be reached at [email protected]