Public

ARB Corporation (ARB) 2015 AGM Voting Intentions

Company/ASX Code : ARB Corporation Limited (ARB)
Registry : Computershare Services
Poll/Show of Hands : Show of hands (poll if required)
Webcast : No
Venue :
11am Westin Hotel (Westin Room III)
205 Collins St,
Melbourne, Victoria
Monitor : Mr Brett Morris
AGM Details / NoM : Thursday 15th October, 2015
ASA Position
Not Applicable
Item 1: Consideration of accounts and reports

ARB is a manufacturer and distributor of 4WD accessories and related products. Net profit after tax grew at a compound rate of 12.1% over the last 10 years to $44.1 million in 2014-2015. In 2014-2015, ARB achieved an increase in its net profit after tax (NPAT) by 3.4% and a 10.7% increase in sales. This compares favourably with 2013-2014 where ARB achieved a 0.5% increase in NPAT and a 2.2% increase in sales. 

During the financial year, 2014-2015, ARB’s share price increased by 6.5%. ARB paid a fully franked special dividend of $1 per share on 5 December 2014. In addition, ARB paid fully franked dividends of 29c per share for 2014-2015, which is equal to the last financial year.  

Sales growth was achieved in all categories. Growth in Exports and Original Equipment was 17.8% and 18.5% respectively with the Australian Aftermarket achieving 7.6% growth.

ARB improved its distribution capacity further by opening a further three warehouses in the last financial year in Australia as well as spending a further $46 million on plant and equipment. Despite this ARB retained a strong balance sheet with $8.1 million remaining in cash. ARB continues to develop highly sought after products and in the last 18 months released the ARB Ascent Canopy, OME Shock absorber, ARB Summit bull bar, ARB Summit rear bar and the ARB aluminium bull bar. 

The six directors of ARB have extensive experience in the 4WD industry and each have substantial experience with ARB with the most recent being appointed in 2006.  With its experienced board, capable senior management, strong balance sheet and considered growth strategies the board is optimistic about ARB’s future. 


ASA Position
For
Item 2: Adoption of Remuneration Report

The board and management structure includes a significant presence from its founders who remain substantial shareholders in ARB. Hence when considering the remuneration policy of this company as aligned to ASA’s voting guidelines, we recognise that there are special, creditable, exceptional circumstances.  

Remuneration is simple - an annual fixed salary for executives which is substantial but modest by comparison with ASX companies. There are no short term or long term incentives. The Executive Chairman received a total fixed salary $336,000 which is unchanged from the previous year. Non-executive directors receive fees ranging from $50,000 to $80,000 reflecting very small increases on the previous year. Each executive director has a substantial shareholding. There are no other executives classified as Key Management Personnel who are subject to remuneration disclosure. The remuneration committee consists of three independent non-executive directors.

There are three executive directors including an executive chairman and three non-executive, independent directors. This structure is specifically noted in the Annual Report as not preferred by the ASX guidelines but considered appropriate and in best interest of this organisation. Succession is an ongoing consideration for ARB and it is quite clear that as the current directors retire a different structure would apply in future. 


ASA Position
For
Item 3.1: Re-election of Mr John Forsyth as a Director

Mr John Forsyth was appointed to the board in 1987. Mr Forsyth has been an executive director since 1989, is Chairman of the Risk Management Committee and has been Company Secretary since 2004. Mr Forsyth has extensive experience in the 4WD business and has a long history of involvement with ARB. Mr Forsyth is a significant shareholder in ARB.  We consider that Mr Forsyth is well qualified and appropriately experienced for the director’s role at ARB.


ASA Position
For
Item 3.2: Re-election of Mr Andrew Stott as a Director

Mr Andrew Stott was appointed to the board in 2006. Mr Stott is a non-executive Director of ARB and a member of the Remuneration and Nomination Committee and the Audit Committee. Mr Stott has broad 4WD industry experience. We consider that Mr Stott is well qualified and appropriately experienced for the director’s role at ARB. 

Mr Andrew Stott has been a director of ARB since 2006. Although being a longstanding non-executive director, Mr Stott does not have any shares in ARB, which is inconsistent with ASA policy. The ARB board does not choose to push this requirement and points out that this must be weighed against the substantial shareholding of the remaining directors in the company who collectively have more than 20%. 



The individual(s) (or their associates) involved in the preparation of this voting intention do not have a shareholding in this company.


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