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3 Quick Things I Learned from Singapore Post’s AGM 2015

3 Quick Things I Learned from Singapore Post’s AGM 2015

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.
  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.

Photo credit: CEphoto

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Robin Han
Rusmin Ang

Rusmin Ang is an equity investor and the co-founder of the online investment magazine The Fifth Person. He is also the co-creator of The Investment Quadrant, an online multimedia stock investment course where students can learn how to invest profitably in the stock market. Rusmin has been featured multiple times on 938LIVE as a guest expert on MoneyWise and is on the speaking circuit for CIMB Securities (Malaysia) and has spoken at events in Penang, Sibu and Kuala Lumpur. Rusmin is also the co-author of Value Investing in Growth Companies which is internationally published by Wiley, Inc. The book can be found in all major book stores worldwide and on Amazon.com,Amazon.co.uk, Barnes & Noble and Apple's iBooks. If you're interested to learn more about stock investing, you can join The Fifth Person Newsletter and receive free weekly insights on how you can generate higher returns and dividend income from the stock market.