Wolf Money(10 things you need to know about ComfortDelgro Annual General Meeting held on 28 April 2023)

 

Lone Wolf is back with 10 things you need to know about CDG AGM held 28 April 2023. I was proxy to attend the meeting. I am glad to be able to share my observations.

(Full attendance by the Board of Directors)

1.) This year annual meeting was held at Singapore Chinese Cultural Centre. Around 400 shareholders attended the meeting. The auditorium was about 80% filled. 

2.) Annual General “Makaners” are in for a treat, Hot buffet was provided and it looks quite yummy. I gave the AGM buffet a rating of 8/10. 😛 I would like to give the company credits for treating their shareholders well with a nice buffet. The Chair and the management also patiently and respectfully answered questions from shareholders online and offline to their best ability. Kudos to the BODs and Management. 👍

(The buffet look sedap(tasty in Malay), look at the queue! I didn’t stay for the food. One of the better AGM to attend for “AGM”)

3.) The new CEO was sharing his credentials when asked about his experience running CDG. He mentioned he was with CDG Australia for 3 years previously before he took up the position of CEO in the enlarged group. ComfortDelGro will have a new Chairperson, Mr. Mark Christopher Greaves will be taking over the chair from the current chairman, Mr. Lim who will be retiring after 41 years.

4.) Mano, a well known minority shareholders’ rights activist asked whether the technology lag in CDG was the main cause of CDG drop in earnings and the failure of the board and management to address the decaying business. The Chairman acknowledged the concern, he also lambasted the uneven playing field for taxi and PHV. He see the continue levelling of the playing field by the authority. He was in approval of his company not subsidising the consumers at the detriment to the company shareholders. Grab and other ride hailing companies had been suffering huge losses since day one. 

5.) Suggestions were given to the company for potential diversification into property development business given the huge land bank in UK. The Chair replied “ Those properties are bus garages which they view as an advantageous operating assets when tendering for bus contracts in London”. The recent sale of a property in London was more likely a one off. They have no interest going into property development business.

6.) Shareholder asked about the potential of restarting the IPO process for the Australia unit. Chairman replied “We are looking to enhance shareholders’ value not limiting to just IPO for the Australia unit”.

7.) Questions on ev charging business were asked. The payback of the business is slow as adoption of EV in Singapore is slow due to a host of concerns of buying an ev in Singapore, eg high COE. The selling of electrons to ev is where the money bag is.

8.) I asked about the rationale of continue investment in UK given the low return, the host of problems not limiting to perpetual weakness in Pound, the endless industrial action in the transport sector, the spending cut to bus route in London by the Tory government etc. I give them an example, if they had spent the money on buying back their own shares, they would have gotten better return. The management admitted to very difficult operating conditions in UK due to industrial action and high inflation. Although things are tough, more opportunities are likely to present itself. Overall in their opinion UK is still an attractive market for them. The increase in wage given to collective bargain can be crawl back through higher tender price. 

(That’s me asking questions)

9.) I touched on the subject of declining taxi numbers and drivers. I commented on the company having an image problem, failing to attract young blood into the taxi driving profession. It took the competition 7 years to halve the taxi fleet and I foreshadow the next halving of the taxi fleet by competitors would be done in less than 7 years if nothing is done to address the drivers shortage and image problem. “We are trying hard to improve our image, by incorporating more technology like Zig app into our business, we also giving out shorter contract to new driver so they can test out driving taxi as a career, replied the CEO. They are exploring how to make their taxi cool to attract younger drivers, one way is by introducing new colourful scheme to their taxi.

10.) Overall 2022 recovery was slower than what the management had expected, they are hopeful of continue recovery in 2023 without giving any financial projection.

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