Oasis reply to Hammill29 Jun 2018 19:01
Oasis Management Company Ltd. responds to comments made by Premier Foods Chairman Keith Hamill in an international business newspaper
London, 29 June 2018 – Oasis, the largest independent shareholder in Premier Foods, notes with dismay the comments denigrating the company’s brands made by Premier Foods’ Chairman Keith Hamill in an international business newspaper on 27th June 2018.
The following statements made by a sitting Chairman were of particular interest to Oasis:
1. “If you have domestic brands that the international market isn’t interested in, you have to keep on working for good value — you can’t successfully auction with weak cards,”
2. He challenged Oasis to come up with an alternative strategy for the highly-indebted group, which has been selling brands and trying to trade its way out of its debt mountain, saying: “What would a new CEO do that is different?”
3. Mr Hamill said the issue of Mr Darby’s pay was a “sideshow”
4. “My advice to Oasis and to other shareholders is that it’s a very well-run business and that it’s
not sensible to go through disruption and change,”
Oasis respond to each of these statements:
1. “If you have domestic brands that the international market isn’t interested in, you have to keep on working for good value — you can’t successfully auction with weak cards,”
Oasis notes that it does not consider Batchelors Soup, a 123 year old brand growing at 11% per year with broker estimated revenues of £80-90 million pounds per year, to be a weak card. Indeed, Oasis finds it extraordinary and unprecedented for the Chairman of a Company to describe the Company’s assets as weak. For the record, Oasis considers the brands within Premier Foods to be exceedingly high quality and very valuable. Rather more ‘gems’ than ‘weak cards’, but gems that seem to be being mis-managed.
2. He challenged Oasis to come up with an alternative strategy for the highly-indebted group, which has been selling brands and trying to trade its way out of its debt moun- tain, saying: “What would a new CEO do that is different?”
It appears to Oasis that the Board has simply given up. Shareholders pay management and the Board to come up with a strategy to deliver value to shareholders. Shareholders expect capital appreciation, dividends and share buybacks from well-run company, none of which are in evidence at Premier Foods. Shareholders have had to suffer persistent shareholder value destruction, poor financial performance, consistent missed targets under Gavin Darby’s leadership.
3. Mr Hamill said the issue of Mr Darby’s pay was a “sideshow”
Taking £8m of pay over his five years as CEO, whilst overseeing a huge destruction of shareholder value is NOT a sideshow. It might be to Mr Hamill and the rest of the Board, but it isn’t to Oasis and is presumably not to other shareholders. Under Gavin Darby’s leadership, Premier Foods’ share price is down 53% from the March 2014 blended rights issue price, 39% down from the £537m 65p per share Marc
Sign In
Follow the stocks
