Waterford takes a shine to its London investors


LOCATION, location, location. That is the battle cry of the property entrepreneurs. But what about non property plcs? Does the location of annual general meetings make any difference?

Apparently Waterford Wedgwood thinks it does as it has changed the venue for this year's a.g.m. This week it will break with tradition and move the location for its a.g.m. from Dublin to London for the first time. That move, however, is unlikely to be emulated by any of the other major Irish companies.

The cynic may argue that the move is a ploy to fend off the flak it has had to endure at all the recent a.g.m.s. Last year, chairman Dr O'Reilly had to defend the "phantom stock options" awarded to Wedgwood's chief executive, Mr Kneale Ashwell. The previous year he had to defend the number of share options granted to the directors.

Many of the 250 shareholders who normally attend the Dublin meeting are unlikely to travel to London, but the move is unlikely to deter anyone sufficiently determined to attend.

But changing the venue appears to be a genuine attempt to bring the a.g.m. to a significant block of shareholders. It can also be seen as an attempt to boost its profile in London.

Not all its shareholders would agree. Indeed, a significant minority appeared to have been opposed to the idea. This was clear from last year's a.g.m. at which shareholders were asked to approve the holding of the a.g.m. in another country.

Under section 140 of the Companies Act, 1963, shareholders have to approve the holding of an a.g.m. outside the State.

It is significant that the response at that meeting was just lukewarm.

Chairman Dr Tony O'Reilly assured that meeting that it was a "once off" proposal, and that no final decision had been taken by the board. But the shareholders appeared to be equally divided on the issue on the show of hands. However, Dr O'Reilly declared that the vote was in favour and added that, in any event, he held proxies representing 65 per cent of the shares which were in favour of the board proposal.

It does not appear to have been an unreasonable proposal, particularly as it was to be a "once off" event. Britain is the home of Wedgwood which accounts for two thirds of the group's business. Also, there are a significant number of shareholders in Britain, many of whom are old Wedgwood shareholders. Some 7,400 of the shareholders reside in Britain, representing 40 per cent of the total, compared with 10,700 in the Republic.

More significantly, the British shareholders only own 21 per cent of the shares, and that was down on the 26.8 per cent in 1994. One wonders if the Waterford Wedgwood board took that sliding percentage into account when the move to London was decided.

It will be interesting to see how many shareholders attend the London meeting. At the Dublin a.g.m.s, very few, if any, of the British shareholders attended the meetings, except those connected professionally with the group. One thing is certain, the London meeting will be more formal which will contrast with the informality of Irish meetings. And Waterford Wedgwood's decision to hold an a.g.m. outside the State is unlikely to be followed by others.

The Jefferson Smurfit Group says it has no plans to hold any of its a.g.m.s outside Dublin even though "approaching 30 per cent" of its shareholders reside outside Ireland. Even if there was a major swing in the shareholder base outside Ireland, the group says it would be unlikely to move the a.g.m.s to a different location.

CRH has no plans to hold any of its a.g.m.s outside the country. Nor does it envisage any circumstances in which it would hold such a meeting. Around 40 per cent of the shares are held outside the State while another 13 per cent are held by non Irish assurance companies with Irish portfolios.

Guinness which is often perceived to be an Irish company, has never held its a.g.m. in Ireland. The group which gained a London share quotation in 1886, told The Irish Times that it has always held its a.g.m. in London because of the sheer volume of British shareholders.

These number 80,000 against just 11,000 Irish shareholders. However, in the last five years some of the monthly board meetings have been held outside London, with an average of one a year in Dublin.

It could be argued that Waterford Wedgwood is one year late in holding the a.g.m. in London. It would have made more marketing sense to have had it in 1995. That was the bicentenary of the death, in 1795, of Josiah Wedgwood, founder of Wedgwood and renowned as the "Father of English Potters".