Feltex loss haunts former director

Joan Withers says any loss of shareholder value disturbs a good director. Photo / Sarah Ivey

New Auckland International Airport chairwoman Joan Withers thinks every day about her time on the board of failed carpet maker Feltex.

Withers, who has been a director of the airport since 1996, was speaking yesterday at the NZX-listed company's annual meeting in South Auckland.

After a presentation from Withers about her re-election, one shareholder said her time on the Feltex board had been overlooked.

"As you pointed out, I resigned from the board of Feltex in early June 2005, which was approximately 15 months before the company went into liquidation and I resigned at that stage to take up the position as [chief executive] of Fairfax Media."

Withers said she had not been involved in recent court cases involving some former Feltex directors and was not part of a pending action potentially being taken by the liquidators.

"I was however a signatory to the [initial public offering] prospectus, which was cleared by the Securities Commission after a 15-month investigation."

The process around the offering from her perspective had been conducted with diligence, care and integrity, she said.

"Having said all of that, there is not a day that goes by that I don't think about the Feltex situation and the Feltex experience. Because being involved in a company where, for whatever reason, shareholder value is lost is deeply disturbing to any director worth his or her salt."

Withers, who was re-elected with a 99.5 per cent vote, said one benefit was what could be learned from such experiences.

"I have to tell you that those learnings continue to inform my performance as a director," she said.

Retiring chairman Tony Frankham said Auckland Airport was broadly on track with all its main forecast value drivers for the 2011 financial year.

The board was optimistic about the 2011 financial year, assuming international passenger growth in the order of 5 per cent and capital expenditure of about $85 million, excluding yet-to-be-committed property development.

Net profit after tax, excluding any fair value changes and other one-off items, was expected to be in a range of $112 million to $118 million, compared with $105.05 million the previous year.

Underlying profit for the year ended June 30, while relatively flat at $105.05 million, was ahead of expectation and the company was well positioned to benefit in 2011 and beyond, Frankham said.

Chief executive Simon Moutter said passenger volumes were consistently running a few per cent ahead year on year "in another indicator that the economy is recovering".

"This year if a few things go right for us and we should be able to get a double-digit profit uplift."

Before yesterday's meeting Auckland Airport revised plans to increase directors' fees by 12.2 per cent to a total bill of $1.29 million a year, proposing to split the rise over two years.

Shareholders Association chairman John Hawkins thanked the board for listening to what the association had to say, having a robust conversation "and coming up with what we think is probably a reasonable compromise".

"And we'll have a look and see just how this performance panned out over the next 12 months at the next [annual meeting]."

The resolution to increase directors' fees was passed by 97.9 per cent. Lloyd Morrison and Brett Godfrey were elected as directors.

Shares yesterday closed down 1c at $2.10.