IN A sign of the times, Australia's corporate watchdog is starting up a new 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 that 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 these days, small and mid-sized (and even some global) practitioners have not caught up with technology, it seems.
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 ASIC 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 in a press release.
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 re-assured.
Maxi plan for maxi result
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, gained 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 prior year's number so investors do not have to work so hard to work out how things are going.
The company earned a shade over $6 million in the first half of the financial year, and every indication when that was reported in February was that things were still steaming along. Insider would also suspect that managing director Michael Brockhoff probably would not have been emptying his wallet on acquisitions if things had turned down.
Even so, the likelihood is 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 its acquisitions 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 year.
Brothers not so grim
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 special 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 that the company's full-year results announcement on Monday will come in at $224 million, which is above the company's forecast and better than the Bloomberg consensus figure of $219 million.
Double vision
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' 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
Notices that would previously have been placed in the ASIC Gazette will still cost $64, but anything else will be $400.
Frequently Asked Questions about this Article…
What is the ASIC new website and when does it start?
ASIC is launching a new centralised website from July to publish public notices about company collapses and creditors' announcements. The site is designed to replace newspapers as the primary venue for those insolvency notices and provide an easy-to-search single source for affected stakeholders.
Which types of public notices and insolvency announcements will be published on the ASIC website?
The website will host public notices that were previously placed in newspapers and the ASIC Gazette, including meetings, deregistrations and appointments of administrators, receivers and liquidators. However, it does not force the insolvency industry to file all underlying creditor documents (like minutes, full financial accounts or directors’ "report as to affairs") into the single venue.
How much will it cost to place notices on the ASIC website compared with newspapers?
ASIC says notices that would previously have been placed in the ASIC Gazette will still cost $64 on the new site, while other types of notices will cost $400. The commission has said these proposed advertising fees should be a significant saving compared with current newspaper advertising costs.
Will everyday shareholders and creditors benefit from the ASIC website when tracking insolvency cases?
Yes — the centralised, searchable website should make it easier for creditors and shareholders to find important insolvency notices without trawling state newspapers. That said, shareholders in public companies remain in a weaker position than creditors and can still be largely excluded from insolvency processes, even though their votes may be needed later for restructures.
How do the Corporations Act changes and the new ASIC website affect employees of collapsed companies?
As part of the Corporations Act overhaul, ASIC is getting extra powers to wind up abandoned companies so employees can make claims under the General Employee Entitlements Redundancy Scheme (GEERS). That change aims to help staff stranded by corporate collapses access entitlements more quickly.
Will the ASIC website hurt newspapers and raise government revenue?
The move away from newspapers will likely reduce classified advertising revenue for at least one national newspaper that currently takes many notices. ASIC’s centralised approach is also expected to generate fee revenue for government coffers, since advertising that used to be placed in multiple papers will now be charged on the ASIC platform.
What recent update did MaxiTrans Industries give and what does it mean for investors and dividends?
MaxiTrans issued a positive earnings update and has been growing through acquisitions. Management says those acquisitions should add about $6.5 million to next year’s earnings before interest and tax, and the company is likely to pay a fully franked final dividend that would put the stock on a roughly 7% yield at recent prices. Investors should watch upcoming results and acquisition integration for clarity on future earnings and dividend sustainability.
What corporate-governance issue did E-Pay Asia face and what should investors take away?
E-Pay Asia’s recent annual report lacked a formal diversity statement required by ASX disclosure principles, prompting scrutiny. Company secretary Robert Lees provided a written explanation but the wording matched that used for another company he represents. The report did note 73 of 147 employees are women and management is partly female, while the board is all male. For investors, this highlights the importance of checking ASX disclosures and "if not, why not" explanations on diversity and governance in annual reports.
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