3 quick things I learned from Singapore Post 2015’s AGM

The recent resignation of CEO Wolfgang Baier raised worries among shareholders about SingPost’s performance moving forward. According to an article from The Business Times, there is speculation that Dr Baier may have been poached by a global firm in a similar space. So why are many people lamenting Dr Baier’s sudden resignation?

The answer can be found from what I learned at SingPost’s AGM 2015:

  1. With traditional mail slowly declining, Dr Baier has been widely credited for turning SingPost around by expanding into the e-commerce logistics space. Since his tenure from 2011, SingPost’s revenue has grown 59% in four years. Shareholders will also be pleased to know that SingPost’s share price has also doubled during that period.
    SingPost revenue
  2. Although revenue has risen sharply over the last four years, net profit has only increased 16%. By examining profits more closely, you will notice that earnings per share has actually fallen – from 7.41 cents in FY11/12 to 6.85 cents in FY14/15. Dr Baier argued that SingPost’s traditional mail business is facing structural change and must continuously reinvest in its e-commerce logistic business to stay relevant. Thus, further costs will be incurred before profit figures rise significantly higher.
  3. With twelve directors on board, a few shareholders were concerned the high number of directors was unnecessary for SingPost. One of them, an NUS professor, highlighted his concerns about the long tenures of the company’s independent directors and the re-election of Chairman Lim Ho Kee. Another shareholder pointed out that director Michael James Murphy, who sits on the risk and technology committee, has only attended one out of four meetings for FY14/15. The chairman agreed that attendance at meetings is important but a director’s contribution goes beyond it. In Murphy’s case, he was unable to attend the meetings due to the different time zones but he still has to answer all calls regarding SingPost’s investments in the USA. The chairman added that he could insist all directors must attend all meetings but he believes that SingPost is a transparent organization and there is no need to impose such a rule on its directors.

Some questions and comments were advised by the chairman to be discussed offline. One of them was regarding the future capex for SingPost’s e-commerce logistic business and some suggestions by shareholders to explore the data center business as part of the company’s diversification strategy.

Expectedly, this year’s meeting was short and sweet.

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Photo credit: CEphoto

Rusmin Ang is an equity investor and co-founder of The Fifth Person. His investment articles have been published on The Business Times BTInvest section and Business Insider. He has also been featured multiple times on national radio on 938LIVE for his views and opinions on how to invest successfully in the stock market. Rusmin is on the speaking circuit for CIMB Securities (Malaysia) and has spoken at events in Penang, Sibu and Kuala Lumpur and is the co-author of Value Investing in Growth Companies published by Wiley, Inc. The book can be found in all major book stores worldwide and on Amazon.com, Barnes & Noble and Apple's iBooks. Rusmin was actually a former SIAEC scholar who gave up his scholarship and a cushy career to follow his itch of learning how to be a better investor and ultimately lead a life of financial independence. He believes that anyone, even with a regular job, can achieve more financial peace-of-mind by investing intelligently and safely for the long term.

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