SUM - Summerset Group

[NZSilver]

I don’t think we can have enough activist investors, don’t think the unions will get in the door though, aside from employee shareholders.

http://www.nzherald.co.nz/nz/news/ar...ectid=11354492

I sold Summerset back in May on what I perceived to be a fundamental shift after a two year hold.

I was content with Quadrant pushing Summerset along, build, build, build, build, it seemed to me that as soon as they left, Summerset management leaned back in their comfy chairs, lit up the cigars, started paying dividends, and contented themselves with a forward build rate at 300units per year. Not a bad growth rate, but lower than what could have been continued from potential.

SUM management could have continued to grow for another 10 years at consistent growth rates but without investors pushing them it seemed to me that they just gave it up to live the fat cat executive life.

That’s not to say that SUM won’t present a good cyclical value investment or perhaps a yield investment in the future, I really do think they will, it just does seem a shame to me that we investors allowed them to take their foot off the accelerator.

I agree with you MAC, I havnt sold (but havnt bought anymore either), however did enjoy the run up over the last few years. I really thought it would be hard pressed to see it go below $3 after it hit mid 3's. Its very disappointing to see the share price languish which sounds as though its secondary to managment languishing. Underlying buisness and industry tailwinds are the goods, however you still need a strong team - especially when you have slick operators like ryman!

[winner69]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

[Xerof]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

yes, agree, good shareholder activism Roger.

I initially gave NB the benefit of the doubt, thought about it overnight, then sold out the next day.

[iceman]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

Yes great to see. Your hard work and consistency has paid off for all of us Roger. Thank you.

[percy]

Yes great to see. Your hard work and consistency has paid off for all of us Roger. Thank you.

I too would like to thank you Roger for putting so much effort into this very important area of concern .
Job well done,and all investors will benefit from you work.
I am sure other companies will tidy up their act too.

[Beagle]

Thanks guys for your kind words. I am pleased to have been instrumental in initiating the process but it was John Hawkins Chairman of the NZSA that did most of the heavy lifting working with the company and NZX. Whilst something of a good result for somewhat levelling the playing field it is disappointing that they only chose to have a black out period of 14 days prior to the release of quarterly sales metrics as in my view directors would have a very good idea what those metrics looked like by the middle of the final month in any given quarter.

Also disappointing is that whilst I made an initial e.mail enquiry to the FMA, (not formal complaint), they never even had the courtesy to acknowledge my enquiry, let alone answer it. It is very disappointing to note that the FMA have never initiated a prosecution for insider trading in New Zealand. My own research has shown the FMA is woefully under-funded on an international comparative per capita basis for all the legislation it is tasked with governing. If you want / value stricter compliance standards and a more rigorous enforcement regime why not let your feelings be known in correspondence to John Key or Bill English ?

John Hawkins assures me that NB had the permission of the board to sell two days before the Q 1 sales metrics in Q1 2014. How the board could not have already realised this was a breech of their existing insider trading policy almost beggars belief ? I'd be the first to acknowledge that I've already vented my spleen fully in regard to this matter so I will simply conclude by suggesting people carefully consider for themselves whether the board and NB have acted with integrity in this matter, whether they can be trusted in other matters to lead this company and whether a 14 day black-out period is sufficient ? For me, I no longer have confidence in the board or CEO of Summerset. I am no longer a shareholder and won't be at any time in the future.

This small victory is bitter sweet for me. On one hand it is nice to be able to contribute towards helping this company and hopefully others that will take notice to improve their governance standards, on the other its a sad that the FMA appear to be so woefully under-funded and that Board and NB between them needed this shareholder activism in the first place. Thankfully there are many other well managed companies to invest in.

[BlackPeter]

This small victory is bitter sweet for me. On one hand it is nice to be able to contribute towards helping this company and hopefully others that will take notice to improve their governance standards, on the other its a sad that the FMA appear to be so woefully under-funded and that Board and NB between them needed this shareholder activism in the first place. Thankfully there are many other well managed companies to invest in.

Hi Roger, I understand what you are saying ... but I don't think you should underrate the size of the achievement nor your contribution. Your preparedness to act and to contact the right people did help to make the world a (little bit) better place - and I am sure, it is not just the SUM board learning from this experience.

Directors are humans, they make mistakes as all of us - and many of them are opportunistic as humans tend to be. Actually - I don't think that they are in average better or worse than any other (randomly selected) group of people on this planet. Some people are criminals, some are saints, some are highly competent and others absolutely clueless. Most of them are "average" (as per the definition of this word) and do probably little harm as long as not challenged. Many of them might behave professional (whatever this means), but if nobody watches than it it is easy to become lazy.

What this little intermezzo did was to make them (and other boards) aware that there are people out there who are watching. This is likely to improve their game - we just need now to make sure we keep the pressure on.

So - Thank you for not just moaning on this forum, but for actually doing something about the problem ... and I think it is as well appropriate to highlight again the contribution of NZSA in listening and doing something about this problem - maybe more of us should join and support them ... I certainly put this on my "To-Do-list!

Thank You.

[couta1]

Thanks Roger for your work and hopefully Sum can up their game going forward, in comparison to the Rym board I see them as inexperienced and a bit high minded they could learn a lot from Simon Challies in his utterly professional approach and humility. Sum is a good company but will have to up their game in a few areas to reach their potential IMHO. Disc-Hold

[Harvey Specter]

Well done Roger - I tried to give you some 'reputation points' but it said I had to spread the love elsewhere first before I give you any more. Well done.

Out of interst, did you get the NZSA involved or did they get involved on their own? Either way, a small win for shareholder activism.

[jmsnz]

Yes, well done from me too Roger.

John Hawkins assures me that NB had the permission of the board to sell two days before the Q 1 sales metrics in Q1 2014. How the board could not have already realised this was a breech of their existing insider trading policy almost beggars belief ?

Just putting whatever 'rules' were in place for the board, it is quite disturbing that a bunch of supposedly highly qualified people charged with leading the organisation could ever think that this action was a good idea!!! Does make you think about their overall decision making process and strategy.