Contact Energy shareholders met for the company's annual meeting in Wellington, disgruntled by a 5 per cent earnings downgrade and an 8 per cent slump in the share price this week, only to have their new chairman-elect confuse which company he was addressing.
Celebrated Australasian business leader Ralph Norris, a director until September of Contact's former cornerstone shareholder Origin Energy, referred on three occasions to Contact as Origin in his first outing in front of around 200 shareholders and staff.
Norris will replace the company's founder chairman, Phil Pryke, who stepped down from the Contact board today after 20 sometimes controversial years with the first of the formerly state-owned power companies to be privatised.
Pryke kept his reminiscences brief, but said he was "deeply, deeply grateful for the opportunity to contribute" to a company that the now Sydney-based businessman told BusinessDesk yesterday was second only to his family among the things he cared about most.
"We didn't get everything right," he said. "I certainly didn't."
But Contact had been a major contributor to the competitive electricity market that New Zealand now has, which is served by around 80 per cent renewable resources, he said.
Pryke became acting chair when Origin Energy sold its 53 per cent controlling stake in Contact in August and at first contemplated remaining on the board before both deciding and being informed by institutional investors, that it was time to move on.
"It was no easy decision," Pryke told shareholders. "I have dedicated a significant part of my professional life to Contact, 20 years in fact, a period that I am extremely proud of.
"However, with strong directors nominated and with Sir Ralph Norris on board to become chairman, I felt confident that Contact would be in good hands and I could retire from the board," said Pryke. The 63 year old faced shareholder revolts through the 2000s for his role as an independent director in recommending two failed takeover and merger bids by majority shareholders and for aggressively pursuing higher directors' fees.
Norris addressed shareholders as part of the process of his formal election to the board, saying he was "proud to offer myself for election to the Origin board", before quickly correcting his "Freudian slip", which he managed to repeat twice more. He comes to Contact after a decorated career as chief executive of the ASB Bank, Air New Zealand and Commonwealth Bank of Australia in the 1990s and 2000s, and only recently departed the boards of Origin Energy and the Fonterra dairy cooperative, where he was one of four commercial, non-farmer directors. He is chairman of Fletcher Building.
Contact had "navigated well" but "the company needs to better going forward," he told shareholders.
Also seeking election for the first time were Rob McDonald, who is chief financial officer at Air New Zealand, and Victoria Crone, the New Zealand head of accounting software firm Xero, both selected for their knowledge of customer relations and digital technology. The board was short a director with technical skills in electricity generation, one shareholder pointed out, but both Pryke and Norris said there would be at least one further appointment to the board later this year and that lack was recognised.
Crone faced a shareholder's question relating to her consideration of a bid for the Auckland mayoralty next year and whether she could commit fully to Contact, given her role at Xero.
She said she would be making a decision on a mayoral bid in the next week and that she had discussed with the Contact board that "if something were to happen", Contact would remain her "top priority." Xero was "very comfortable" with her taking the Contact directorship, she said.
The election of all three appeared assured, based on proxy votes received before the meeting.
Chief executive Dennis Barnes sought to reassure shareholders that they would see "gradual improvements" in Contact's performance, in spite of this week's announcement that customer losses caused in part by a problematic IT project implementation, lower margins and higher-than-anticipated costs associated with the Origin departure would see the company's 2016 financial year operating earnings come in little different from last year's.
In a note to clients yesterday, broking house First NZ Capital said the announcement amounted to a downgrade of around $30 million, or 5 per cent on previous guidance.
The Contact share price drifted 0.4 per cent lower in morning trading to $4.56, having started the week at $5. The shares have fallen 16.9 per cent in the last year.
Barnes conceded that in giving assurances, "clearly this week is not a good week to be making those statements."