Law firm says new landscape may boost shareholder activism.

Chapman Tripp is predicting a bit more fireworks during the 2015 annual meeting season than shareholders may have been used to in previous years.

In a bulletin published this week, the law firm said several recent developments in the investment landscape could drive a "new phase" of shareholder activism.

These include the formation of the New Zealand Corporate Governance Forum - whose members include most of the country's major fund managers - and changes in the share registers of major companies such as Contact Energy.

ASX-listed Origin Energy divested its 53.1 per cent stake in Contact through a $1.8 billion block sale this month.

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Chapman Tripp says the forum indicated it "means business" through using its debut to release a set of guidelines for the directors of listed firms, some of which "strain the bounds of practicality".

These guidelines include listed company boards being comprised of a majority of independent, non-executive directors, and board members who have served more than nine years being subject to annual re-election.

Chapman Tripp also says direct electronic voting, available since 2012, is only now being widely used.

"This should increase voting among those shareholders who do not attend AGMs."

Cutting the thread

Sir Ron Brierley has made the final move in severing his links with Coats Group - the NZX-listed threadmaker formerly called Guinness Peat Group.

Chairman Mike Clasper this week confirmed that Brierley - who took control of GPG in the early 1990s after he was dumped as chair of Brierley Investments - had sold his 16.9 million remaining Coats shares.

He said suggestions in a media report that Brierley, who departed from Coats' board in April, should have disclosed his share sale were incorrect.

Directors and senior officers' disclosure responsibilities remain in place for six months after they step down, but Coats is exempt from that requirement because its primary listing is on the London Stock Exchange, he said.

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A good buy?

Craigs Investment Partners has retained its buy rating on Fletcher Building following the company's annual result, saying shares in the construction and building materials firm are looking cheap compared with sector peers.

The company's full-year profit, reported on Wednesday, fell 20 per cent on the previous year to $270 million. The result included $150 million in one-off costs, including goodwill impairments, mainly in its Australian businesses, and site closure costs.

In a research note, Craigs said Fletcher was trading at 12 times earnings expected for the 2016 financial year, compared with 15.3 times in its Australian peer group and an international peer group average of 17.2 times 2016 earnings.

The brokerage said New Zealand was the stellar performer in the result, with revenue on this side of the Tasman lifting 10 per cent year-on-year.

"Given the outlook for continued growth in New Zealand demand, we believe it is likely margins will expand further in FY16."

Craigs has a 12-month price target of $9.94 on Fletcher shares, which closed down 14c last night at $7.65.

Morningstar, which has a hold recommendation on Fletcher, said it was a solid annual result, supported by strong growth in its distribution and construction businesses.

"We expect earnings to improve as infrastructure spending accelerates in 2016 and 2017."

Caffeine buzz

Research provider Edison placed a bullish valuation on Cooks Global Foods this week.

But the 23c per share price target - more than 90 per cent above the current price - is based on the NZAX-listed Esquires coffee house franchisor achieving the highly ambitious target of boosting store numbers from 77 to 710 by the 2021 financial year.

It is also predicated on the company completing a $9 million capital raising from China's Jiajiayue Group and Cooks executive chairman Keith Jackson. The company is also looking to raise another $9 million through a public offer.

Jackson told Stock Takes in January that Cooks was considering raising capital through listing on NZX's new NXT market.

The Edison report, paid for by Cooks, said negative earnings were anticipated in the near term as the company co-invests with franchisees on the refurbishment of another 22 British stores, as well as establishing a five-store "beachhead" in the United States.

The Auckland-based firm posted a $4 million loss for the 12 months to March 31.

Shares in Cooks, which holds the international franchise rights to Esquires outside New Zealand and Australia, closed unchanged at 12c last night.