The Crikey family recently bought 40 shares in Australia’s biggest plumbing and bathroom products distributor, Reece Ltd, to take up the opportunity to meet the very private but extremely wealthy Wilson family, who control 76% of the stock and were hailed as billionaires by BRW in the 2005 Rich List.
Sadly, a prior commitment means I probably won’t be able to make Thursday’s AGM at 3pm at Reece’s head office in the Melbourne suburb of Burwood. But as a registered shareholder I’d love to find a volunteer proxy who could explore a few tenure and transparency issues. Try this for a board line-up:
Alan Wilson, 64, executive chairman since 2001, CEO since 1974 and a director since 1969
Bruce Wilson, 59, director since 1970 and secretary from 1974 until retirement from executive duties in 1999
John Wilson, 67, non-executive director since 1974
Peter Wilson, 37, executive director since 1997 and now general manager operations
Ronald Pitcher, 66, director since 2003 and now chairman of the audit committee, keeping his old firm Pitcher Partners on their toes as auditor
That’s an average of 20 years, with the longest-serving executive director at 36 years and the longest-serving non-executive director at 35 years. With 24% in the hands of the public, you’d think one token independent director could be found.
It certainly trumps the old boys club at Gunns Ltd and even gives toilet manufacturing giant GWA International a run for their money. But at least Reece is clearly controlled by its founding family and the performance has been good in recent years with a record net profit of $75.3 million after sales cracked $1 billion for the first time in 2004-05.
However, the annual report is the most spartan effort by a $1.5 billion company that you will ever see. You’d think Australia’s largest bathroom and plumbing products supplier, which owns its 230 stores, would know something about producing glossy documents, but there’s not a photo to be seen in the annual missive to shareholders.
The Wilson family should either take Reece private or get with the program. Some razzle dazzle for the analysts and some decent corporate governance would probably trigger a re-rating and add $200 million to their paper wealth in no time. Yet Commsec won’t even margin lend against this mob, they’re that far off the radar.
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Alan Wilson’s chairman’s address at last year’s AGM went for 30 seconds so this situation is ripe for some Crikey engagement. The first question should be to the auditor, asking how he feels answering to his old boss. HIH anyone?
Please email [email protected] before 3pm today if you’re available to go, otherwise I’ll be putting the heavies on Mrs Crikey and she’s not keen, although the saga of our new kitchen might give her plenty of things to talk about.