Public

Mystate (MYS) 2015 AGM Report

Company/ASX Code : Mystate Limited (MYS)
Venue :
10.30am Hobart Function & Conference Centre,
1 Elizabeth St,
Hobart, Tasmania
Monitor : Mr John Quinn
AGM Details / NoM : Wednesday 21st October, 2015
# of Attendees : 62 shareholders plus 12 visitors
# Holdings represented by ASA : 64
Value of Proxies : $2.2 million
# Shares Represented by ASA : 506,000
Market Capitalisation : $380 million

Skin in the game for executives and NEDs

Chairman Miles Hampton stated that although the underlying net profit ($29.7 million) for the year was only marginally above last year the initiatives taken throughout the year had built momentum for future growth. The banking business generated a 16.3% growth in the loan book.  The majority of increase came through the mortgage broker channel where service levels have been improved.

The net interest margin fell from 2.43% to 2.38% due in part to the higher component of broker introduced loans. Cost to income was down to 64.4% from 64.5%.

Net profit after tax (NPAT) was $32.5 million up 9.8% on prior year, however this included $3.9 million profit from the sale of the shareholding in Cuscal. Statutory earnings per share were 37.3c but the underlying earnings per share were 34.1c. The dividend for the year remains at 28.5c.

The Chairman said that unlike the large banks there is no need to raise capital for changes in regulatory requirements and any capital raising will be used to fund growth. Capital adequacy of 12.7% is well ahead of regulatory requirements. The sale of Cuscal was principally a capital management initiative, as it was a non-core business.  Post balance date MyState issued $25 million in tier 2 notes.

In the Wealth Management business, a 1% growth in in funds under management generated additional income of $182,000(2.0%). Capital and income commissions from Trustee Services grew by $263,000 (8%).

The ASA congratulated the board for introducing a “minimum shareholding requirement” for non-executive directors and key executives.  Non-executive directors are required to acquire and maintain shares in MyState equivalent to one year’s pre-tax base fee. This must be reached within 4 years of their appointment. Executives who receive a fixed annual salary in excess of $250,000 and participate in the companies incentive programs must purchase and hold shares to the value of 25% of their fixed salary, within 4 years of their appointment. For existing directors and executives, the 4 years started from 1 January 2015. The board can waive the requirement but it is clear it intends to ensure that non-executive directors have “skin in the game”.

All resolutions were passed on a show of hands.