Mayfield AGM results highlight persistent divisions despite upbeat addresses

After narrowly averting a “board spill” earlier this year, the results of ASX listed early learning provider Mayfield Childcare’s Annual General Meeting highlight the divisions across the organisation’s shareholder base that persist. 

 

Across the six resolutions tabled, two were not carried, and one, “the adoption of the remuneration report” was carried but had a sufficient number of no votes to merit a “strike” being triggered. 

 

“A strike” is a technical term that calibrates the degree of disapproval a publicly listed company’s shareholder base feels towards remuneration policies of its board and leadership and is triggered when more than 25 per cent of shareholders vote “no” to the resolution. 

 

49.7 per cent of proxy votes voted “no” to the adoption of Mayfield’s Remuneration report, although this fell to 43.44 per cent when in-person votes were included. The final tally was still well above the “strike threshold” of 25 per cent signaling a high degree of discomfort across shareholders as to the remuneration policies adopted by the company. 

 

With respect to the two non-carried resolutions the election of Jason Taleb as a director was not carried, with 54.1 per cent of votes lodged against the motion.

 

Mr Taleb will now not be joining the board. 

 

In the wake of these voting outcomes the Mayfield board will remain at three directors namely; David Niall, Chairperson; Roseanne Healy, Director; and Ashok Naveinthiran, CEO and Managing Director, one person short of the minimum of four directors aspiration. 

 

Despite divided voting outcomes Mayfield provided upbeat trading update

 

Both Mr Niall and Mr Naveinthiran provided relatively upbeat assessments of the businesses current standing with both signaling that Mayfield is emerging from a challenging prior period. 

 

“This has been a year of significant progress for the Company as we focused on building a culture of integrity, respect and accountability across the Company after a period of management change and instability,” Mr Niall said. 

 

Mr Naveinthiran added that “despite a challenging start to the year with external disruptions at both centre and corporate level, we are pleased with the operational improvements achieved in the first four months and the significant year on year uplift in financial performance.”

 

Centre earnings (EBITDA) rose to $0.96 million in the first four months, up 70 per cent on the previous year driven by revenue increases of 13 per cent and more officiant roster management practices. 

 

The company also confirmed that a revised incubator agreement had been finalised which will see all in-bound centres subject to a 100 per cent earn out structure with deferred consideration eliminating the need for any up-front payments to be paid. 

 

Additionally, acquisitions under the agreement will be valued at 4.25x Year 2 actual EBITDA if paid in equity or 5.00x Year 2 actual EBITDA if paid in cash. The address did not confirm which party, buyer or seller, is able to dictate the consideration pathway. 

 

To review the Mayfield AGM addresses please click here and for the voting results, click here.