In a sign of the times, the corporate watchdog is starting a website from July that will replace newspapers as the venue for public notices on company collapses and creditors' announcements.
The plan, though, falls short of requiring the insolvency industry to file to a single venue all the creditor information documents it has to produce in the course of saving/burying a corporate structure - such as minutes of meetings, financial accounts, and the "report as to affairs" filings, where directors estimate the assets and liabilities.
While several of the large, specialist insolvency practices provide creditor-friendly information on their websites, small and mid-sized (even some global) practitioners have not caught up with technology.
The lack of easily obtainable insolvency information is even worse for shareholders in public companies, who do not even rate as creditors and are largely excluded from the process - even though there is a chance their votes may be needed later to restructure a company.
The website is one of several changes coming out of the latest overhaul of the Corporations Act. The changed regulations will also give ASIC some extra muscle for the benefit of employees stranded in collapsed companies, giving the regulator the power to wind up abandoned companies so that staff can then make claims under the General Employee Entitlements Redundancy Scheme.
The new website will probably not please the publisher of at least one national newspaper which sources a fair slice of its classified advertising revenue from notices of meetings, deregistrations and the appointments of administrators, receivers and liquidators.
Cannily, not only is the Australian Securities and Investments Commission plan going to produce a centralised point - it will raise revenue for government coffers.
"This is a positive initiative for people affected by the insolvency of a company. It contributes to a fairer and more efficient market by reducing cost and providing opportunities for affected stakeholders to access important notices relating to insolvent companies from a single, easy-to-search source rather than trawling through individual newspaper advertisements in each state," said ASIC's deputy chairman, Belinda Gibson.
Notices that would previously have been placed in the ASIC Gazette will still cost $64, but anything else will be $400, although "The proposed advertising fees for the website are believed to represent a significant saving on the current cost of newspaper advertising", the commission reassured.
CARRY THAT LOAD
If the board of MaxiTrans Industries was hoping that yesterday's positive earnings update would give its shares a kick along, they must have been slightly disappointed.
The truck and trailer maker which has been on an acquisition spree of late rose 2? to 55?, but that was not a height it had not previously scaled.
Perhaps that is because, apart from being capitalised at just over $100 million, those who follow the group would probably not have been surprised that its full year result was going to top $12 million.
MaxiTrans also did what Insider thinks every company that produces a profit revision ought - put in the previous year's number so investors do not have to work so hard to see how things are going.
The company earned a shade over $6 million in the first half of the financial year, and when that was reported in February there was every indication that things were still steaming along. Insider would also suspect that the managing director, Michael Brockhoff, probably would not have been emptying his wallet on acquisitions if things had turned down.
Even so, the likelihood is that MaxiTrans will pay a fully franked 2? a share final dividend, matching its increased interim payout, which on yesterday's closing price puts it on a yield of 7.3 per cent.
If its forecast is right that the companies that it has bought will put $6.5 million onto next financial year's earnings before interest and tax, and even if there is no growth in the existing business, the group is likely to be earning between 8? and 10? a share next financial year.
BOUNCING BACK
Panic over, some of the stocks that were belted in the market on Wednesday enjoyed a turnaround yesterday.
Campbell Brothers, which Insider singled out for mention, did not recover all of its losses, but did pick up $1.80 to finish at $59.65 a share.
Part of that may be some staunch support from its native Queensland where local broker RBS Morgans upgraded its recommendation from hold to buy (in a note dated Wednesday when the stock was plunging). RBS Morgans analyst Roger Leaning, described the price rout as "an indiscriminate macro driven sell-off".
Leaning reckons the company's full-year results announcement on Monday will come in at $224 million, above the company's forecast and better than the Bloomberg consensus figure of $219 million.
GENDER RULES
E-Pay Asia's company secretary, Robert Lees, did not have to go far to find an explanation for the lack of a diversity statement in the company's recent annual report.
The ASX has been scrutinising every company's annual report since diversity and gender disclosure principles were introduced, because compliance is part of its listing rules. Those that choose not to follow the corporate governance recommendations must give an "if not, why not" explanation.
Lees's response to the query on E-Pay's behalf was a few paragraphs, which looked as if they formed part of a formal report. Insider could find nothing like it on E-Pay's website but did note that the annual report of OGL Resources, where Lees is also company secretary, had near-identical wording (including the same spelling mistake).
For the record, 73 of E-Pay's 147 employees are women, as are three of its 10-person management team. The board is all male but "it is anticipated that there will be more opportunities to further increase the participation of women".
insider@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
What is ASIC’s new website for insolvency and creditor notices and when does it start?
From July, the Australian Securities and Investments Commission (ASIC) is launching a centralised website to replace newspapers as the main venue for public notices about company collapses and creditors’ announcements. The site will provide a single, easy-to-search source of important insolvency notices instead of trawling state newspaper ads.
How will the shift to online creditor notices affect everyday investors and shareholders?
The move to online notices should make it easier and cheaper for affected stakeholders — including investors — to find important insolvency information from one central place. However, the article notes shareholders in public companies are often excluded from the creditor process even though their votes may be needed later in restructures, so online access improves transparency but doesn’t automatically change legal entitlements.
Will every insolvency document (minutes, financial accounts, reports as to affairs) be available on ASIC’s new site?
No. The plan stops short of forcing the insolvency industry to file every creditor information document to a single online venue. Key documents such as minutes of meetings, full financial accounts and directors’ “report as to affairs” are not guaranteed to be published centrally under the current proposal.
How much will it cost to advertise insolvency notices on the new ASIC website compared with the ASIC Gazette and newspapers?
According to the article, notices that would previously have been placed in the ASIC Gazette will still cost $64. Other notices on the proposed website will cost $400. ASIC says these proposed advertising fees should still represent a significant saving compared with the current cost of newspaper advertising.
What other changes to the Corporations Act will affect employees and creditors?
The overhaul of the Corporations Act includes new powers for ASIC to wind up abandoned companies. That change is intended to help employees stranded by collapses so they can make claims under the General Employee Entitlements Redundancy Scheme (GEERS).
Will newspaper publishers be affected by the move to online notices?
Yes — the article suggests at least one national newspaper that earns a fair slice of classified advertising revenue from insolvency notices, appointments and deregistrations will probably not be pleased by the shift to a government-run online noticeboard.
What did the article say MaxiTrans Industries investors should know about the recent update and dividend outlook?
MaxiTrans’s recent earnings update produced only a modest share gain, despite the company’s acquisition activity. The group is capitalised at just over $100 million and Insider expected its full-year result to top $12 million (the first half was a shade over $6 million). The article suggested MaxiTrans is likely to pay a fully franked final dividend matching its increased interim payout, which at yesterday’s closing price equated to a yield of about 7.3%. Acquisitions are forecast to add roughly $6.5 million to next year’s earnings before interest and tax.
What investor-relevant company notes did the article mention about Campbell Brothers and E‑Pay Asia?
Campbell Brothers bounced back after a sharp sell-off, picking up $1.80 to finish at $59.65 a share, and local broker RBS Morgans upgraded its recommendation from hold to buy; its analyst Roger Leaning described the earlier fall as an “indiscriminate macro driven sell-off” and expected the company’s full-year results to come in ahead of consensus. For E‑Pay Asia, the article discussed its absence of a formal diversity statement in the annual report: the company secretary provided an “if not, why not” style explanation as allowed by ASX listing rules. The report shows 73 of 147 employees are women, three of 10 management roles are held by women, and the board is currently all male but the company said it anticipates opportunities to increase women’s participation.
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