Kier Group: three strikes

Beleaguered construction and services business Kier Group’s AGM last week threw up a number of interesting issues. Since the failure of both Carillion and Interserve, the company has been both watched closely and shorted heavily.
Following on from a flopped rights issue around this time last year, Kier Group has changed personnel and sought to steady the ship.
In that context, last week’s meeting was probably unhelpful. Most attention has focused on the remuneration report vote, which the company narrowly lost with almost 54% voting against. But arguably more significant was the announcement, on the day of the AGM, that its chief operating officer, Claudio Veritiero, was standing down with immediate effect.
Veritiero was the last member of the executive team in place under the leadership of former chief executive Haydn Mursell, who was forced out following the rights issue. As a result of his departure the company pulled the resolution on his re-election, and as such no voting result is available. That’s a shame, as it would be useful to see if the move was at all instigated by shareholders.
But there’s another story lurking in the AGM results. These show that a little over 71m votes were cast out of total issues shares of 162m, meaning a turnout of 45.7%. That’s pretty low for a PLC these days, but also compares to 54% at last year’s AGM (a reduction of 15%) and around the 60% mark for the preceding three years. So turnout has reduced by almost a quarter as the company has got into deeper water. As we’ve noted previously, this has happened at a number of companies where the level of shorting is significant, so may reflect a failure of lenders to recall their stock to vote. Or perhaps it’s just a coincidence. But it strikes us as worthy of further investigation.

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