ATM - A2 Milk Corporation Limited

[Beagle]

Repeat:

Jane joined on 16 July 2018 when ATM's sp was $10.75 - it is now $14.62, was $15.15 before the shock announcement.

That's 36% up or $2.92 billion increase in market capitalization since she took the helm.

Contrary to whatever others may think, I think she deserved every cent of what she was paid - it is less than 1% of the wealth created under her term.

Okay, lets go there mate. Here's how I see it. I know others will have a different point of view and that's fine.
Its an extremely volatile share so I think any analysis of the share price over her tenure should be based on a 90 day VWAP to smooth out the very volatile nature of the share price. For example in February 2018 it hit $14.70 in intra day trading so it all depends upon your frame of reference.
Looking at the chart for the last 2 years I would infer an approximate 90 day VWAP of about $12 before she was appointed and approximately a $14 90 day VWAP in her last 3 months.

If you smooth out the volatility it could easily be argued she added nothing as 14/12 = 16.7% gain in 18 months and in that period the NZX50 went up approx. 25%.

Any analysis of her performance whether its based on spot prices or VWAP must be measured in the context of the NZX50 as its clear with the substantial decline in interest rates in the last 2 years PE multiples have expanded.

I think she created nothing and simply built upon the momentum that was already clearly evident in the business under Geoffrey Babbage's excellent leadership.
It is abundantly clear and an undeniable historical fact that sales and eps growth slowed considerably (compared to previous rates of growth) under her tenure.

I argue she created no value under her term and any attempt to justify her remuneration based on a percentage of value created is spurious at best and conceptually fundamentally flawed without a comparison to NZX50 relative performance.

I'm going to leave it at that.

[Balance]

Okay, lets go there mate.
I argue she created no value under her term and any attempt to justify her remuneration based on a percentage of value created is spurious at best and conceptually fundamentally flawed without a comparison to NZX50 relative performance.

I'm going to leave it at that.

Which, Beagle, is fine.

What is highly objectionable is as W69 pointed out, some posters putting the boot in now after praising her strategy to high heavens previously - high growth strategy is ok with lower margins, look at the long term etc etc. Adds nothing to a proper assessment of the situation which warrants proper examination.

Not meaning you of course.

Increasing margins in the short term is easy - just cut back spending.

There's a big price to be paid in future though as many a company has found when they cut back spending on R&D, promotion and marketing, brand building and upgrading personnel.

Whirlpool comes to mind.

[mfd]

It's virtually inconceivable that the company could have continued growing at the previous breakneck speed when it has grown so large. Growth was always going to slow down, and I've been quite happy with progress over Jane's tenure. I sold down a few yesterday but A2 remains one of my largest holdings, I hope that this doesn't mean the company is going to reign in the aggressive expansion outlined recently.

[t.rexjr]

https://www.stuff.co.nz/business/118...-18month-reign

No wonder she looks smug, shareholders have been thoroughly "milked".

That's a lot of cream. Quite filling... But when it came to fulfilling the role... Not so keen...

[winner69]

Maybe the Board looked at the H120 forecast and said hells bells only 30% revenue growth on pcp and if we’re lucky 18% ebitda growth (compared to revenue growing 40% plus in last couple of years). That means in relative terms H1 is a shocker - worst for some time.

Jayne - your strategy not working that well - instos not happy - your words not turning into reality - time to go

Jeez H220 better be a boomer or else FY20 won’t be reflecting the intent of this ‘strategic growth’

Question - if the strategy they agreed to prosecute is only delivering 30% revenue growth and 20% ebitda growth isn’t something wrong.

I’m feeling like t_j’s mate Chelsea - rather confused

[Beagle]

With Marketing it must be carefully targeted, planned and executed. Scattergun approaches can be analogous to throwing money to the wind and tens of millions can easily be wasted. Marketing low cost third rate airline seats that potentially almost anyone might buy is very different to building brand awareness of a high end dairy company that only a small percentage of customers might buy.

Throwing Jayne into this was like taking someone off the lot of a Turners Car yard that specialised in disposing of end of life vehicles and appointing them as CEO for Mercedes-Benz New Zealand. Some appointments were always destined to fail and were never a good fit from the outset.

HLG have a good disciplined approach where they're targeting social media and digital channels. Very smart operators when it comes to marketing spend.

[couta1]

How are your shorting mates going today bull? Must be feeling a bit of chafing heat I reckon.PS-Amazing how my 160k down yesterday has nearly reversed, well actually not.

[Ted2]

Aussies liking Geoff's resurrection by the looks.

Don't believe her departure is anything to do with the strategy. Things have been tracking well, and the strategy makes sense. Besides the board signed it off and clearly agreed.

The wording "......has agreed to step down from her role....." is pretty clear - she was pushed. We may never know exactly why, but relationships are likely the main reason.

She may well be a smart and good CEO, but it has appeared from the start that she is far more about Jayne than she is about anything else.

[winner69]

A2 Milk wanted a change agent but was rattled by Hrdlicka's speed

https://www.smh.com.au/business/comp...09-p53i5k.html

Oldies couldn’t hack the pace I reckon

[bull....]

How are your shorting mates going today bull? Must be feeling a bit of chafing heat I reckon.PS-Amazing how my 160k down yesterday has nearly reversed, well actually not.

like you not sweating the small moves. time will tell who was right jane or hearn.