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QUALIPORT
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Qualiport
[ November 24, 1999 ]
Getting To Know You
By Maynard Paton (TMFMayn)
(the Fool Formerly Known As WainscottBoy)
When asked to join The Motley Fool UK, one of the first things that sprang to my mind was "I'd better get familiar with the Qualiport constituents". Although I know what each of the Qualiport companies does, having the TMF prefix does give the implication that I know something more about a company that just what line of business it is in. Oh, and a bit of Qualiport familiarity could also bring some help with Bruce's decision-making...
As I'm sure all Qualiporters are aware, the best source of information about a quoted company is produced by the company itself -- the Annual Report. To remedy my lack of knowledge about the Qualiport and its UK members, it was time to contact each company direct. A good opportunity to see how each company treated prospective shareholders in delivering information relevant for a share purchase.
In my view, the response from this "Shareholder Information" enquiry has always been very important. It's the first contact with the company and as everyone knows, first impressions count. Does the company make you feel welcome as a prospective shareholder? Or do they give you the impression that you are a nuisance? Indeed, do they ignore you totally?
A prompt response, delivering the required information, does give that good initial "feel" to a company and indicates how it treats current and potential shareholders. A tardy response, delivering part of what was required does, to me, give a very bad impression. Even if the company looks very attractive -- say, operating in a growth sector, dominating its market, great cash flow -- I always ask myself this question:
"If the company can't deliver a set of annual reports on request, how does it cope with the far more difficult task of running a publicly-quoted business?".
Personally, I am unwilling to give any company the benefit of the doubt for a poor or 'zero' response when it comes to a simple request for information. If they don't send the required level of information, and I'm looking for the last four or five annual reports at least, then I won't investigate further into the company.
I wrote to each of the UK based Qualiport companies and asked for:
-- every annual and interim report they had available, ideally covering the last five years;
-- any other information that potential shareholders would find useful. For example, brokers' reports and company marketing brochures;
-- my details to be placed on a mailing list for subsequent company reports, as any investment made would be in a nominee name.
So, how did they all fare? Well, a response was received from each, but room for improvement.
In some sort of very subjective, quasi-Rule Shaker-type scoring system, I'll individually mark each company on the following basis.
-- The promptness of the response. Marks out of five.
-- The information delivered. A point for each Annual Report, half points for each interim report, and bonus points for any additional information.
-- Mailing list confirmation. Two points for any covering letter confirming mailing list registration.
The "Requests for Shareholder Information" were addressed to the "Company Secretary" at the relevant Head Office and posted on Thursday 30th September.
So, the marks awarded for the companies in the order they responded:
Emap (LSE: EMA)
Promptness: Arrived two days later, 2nd October. I couldn't expect any better. Top marks here.
Information: Five annual reports and four interim reports delivered. The annuals covered 1994 and then 1996-1999. 1995 was missing. Similarly, an interim covering 1995/1996 was missing.
Mailing List. No covering letter. Zero points.
Overall Score: 5+5+4+0 = 14 points.
Lloyds TSB (LSE: LLOY)
Promptness: Just like EMAP, arrived two days later. Top marks again.
Information: Only the four annual reports from 1995 to 1998 were sent. Four points.
Mailing List: No covering letter. Zero points.
Overall Score: 5+4+0 = 9 points.
Independent Insurance (LSE: IIG)
Promptness: Arrived four days later, 4th October. Five points awarded.
Information: Annual reports 1993, 1995, 1997 and 1998. No 1994 included. Interim reports 1994, 1995, 1996, 1997 and 1999. No 1998 included.
A company brochure detailing their operations was included giving one extra bonus point. A total of 6.5 points.
Mailing List: No covering letter. Zero points.
Overall Score: 5+4+2.5+1+0 = 12.5 points.
Misys (LSE: MSY)
Promptness: Arrived five days later, 5th October. Four points.
Information: All annual reports 1993 through to 1999 and the latest interim report. No additional information was supplied. A total of 7.5 points.
Mailing List: No covering letter. Zero points.
Rentokil Initial (LSE: RTO)
Promptness: Arrived six days later, 6th October. Four points.
Information: Four annual reports covering 1995 to 1998, and three interim reports covering 1997 to 1999. A total of 5.5 points.
Mailing List: At last, a covering letter! But what disappointment though! Rentokil "in common with many UK companies, does not add individuals to its mailing list -- only companies". A rather irritating, slightly arrogant, and in my experience, a unique response. So a score of -2.
Overall Score: 4+4+1.5-2 = 7.5 points.
Unilever (LSE: ULVR)
Promptness: Arrived eight days later, 8th October. Three points.
Information: In terms of company reports, only the latest annual report was sent. A very poor response. An additional brochure listing UK products was also included. Two points only.
Mailing List: No covering letter. Zero points.
Overall Score: 3+1+1+0 = 5 points.
PizzaExpress (LSE: PIZ)
Promptness: Arrived sixteen days later, 16th October. Just one point.
Information: Superb. Seven annual reports covering 1993 to 1999 and six interim reports since 1994 gives 10 points. Great additional information as well. Four different brokers' reports and a company marketing brochure. Five extra bonus points.
Mailing List: No covering letter. Zero points.
Overall Score: 1+7+3+4+1+0 = 16 points.
And back to Lloyds TSB again!!
Somewhat bizzarely, Lloyds TSB decided to send all their annual reports again three weeks later. Alongside them this time was their latest interim report. I'll generously give Lloyds the extra half point -- though I do hope they don't waste shareholders' money by duplicating effort all the time.
Adjusted Overall Score: 9.5 points.
Any conclusions?
A fair range of information was sent from each company. PizzaExpress was by far the most helpful with an excellent response. They delivered every report the company has ever produced and sent four informative but at times, very Wise, brokers reports. Maybe my two-week wait in receiving this information was for those at PizzaExpress to collect all the reports. If so, it was worth the wait.
Moving to the bottom of the table... Is it a coincidence that the two companies propping up the table, Rentokil and Unilever, are the two that Bruce has been most disappointed with recently? Regardless of their operating performances of late, the poor enquiry response from these two companies certainly doesn't give me any inspiration to delve deeper into their investment credentials.
And am I on any mailing list? Well I'm certainly not on Rentokil's, but time will tell about the others.
So to sum up, the "Qualiport Shareholder Information Response League".
PizzaExpress 16 points
EMAP 14 points
Independent Insurance 12.5 points
Misys 11.5 points
Lloyds TSB 9.5 points
Rentokil 7.5 points
Unilever 5 points
Questions and comments to the Qualiport board, please.
Qualiport Numbers
24/11/1999 Close
Company Change Bid
DELL(US)-0.60 41.10
EMA -0.10 11.15
IIG 0.00 2.68
MSY -0.08 6.73
PIZ 0.00 7.80
RTO -0.01 2.40
ULVR +0.22 4.74
LLOY +0.16 8.64
Qualiport Stocks
Last Rec'd Total # Company Buy Current Change
22/04/99 542 Misys 5.57 6.73 20.7%
29/09/99 356 Lloyds TSB 7.56 8.64 14.4%
17/04/98 301 Emap 10.20 11.15 9.3%
27/10/98 1133 Indep Ins 2.60 2.68 3.1%
04/11/98 245 Pizza Exp 7.93 7.80 (1.6%)
19/12/97 783 Rentokil 2.55 2.40 (5.9%)
27/01/99 74 Dell (US) 44.63 41.10 (7.9%)
17/07/98 266 Unilever 7.53 4.74 (37.0%)
Last Rec'd Total # Company In At Value Change
22/04/99 542 Misys 3065.85 3647.66 581.82
29/09/99 356 Lloyds TSB 2723.20 3075.84 352.64
17/04/98 301 Emap 3139.85 3356.15 216.31
27/10/98 1133 Indep Ins 2990.63 3036.44 45.89
04/11/98 245 Pizza Exp 1966.34 1911.00 (55.34)
27/01/99 74 Dell (US) 2007.42 1843.27 (164.15)
19/12/97 783 Rentokil 2046.53 1879.20 (167.33)
17/07/98 266 Unilever 2052.00 1260.84 (791.16)
Cash: £ 28.46
Current Total : £20,038.86
Total Invested: £20,184.62
Profit/(Loss) : (£ 145.76)
Value Per Share
Day Month Year
Qualiport 0.04% 11.61% -5.12%
FTSE 100 0.42% 4.89% 11.55%
FTSE All Share 0.32% 5.59% 14.69%
