Do you contact companies?

[WickedLester]

These days I don't spend as much time contacting companies as I used to, mainly because I now take smaller stakes in more companies than when I first started investing, when I used to take much larger stakes in a small number of companies.

But recently I have contacted 3 companies I have shares in and there is a marked difference in the responses I have got.

For example I sent ODX an email after the recent mini disaster there and got a polite email from the FD early the following morning. Maybe if I was being cynical I could suggest that when you appear to have screwed up as badly as they have and when there may or may not be the prospect of another fundraising, that looking after your shareholders makes sense. But still I was pleased at the prompt response and answers to my questions.

Then there's ASTO. I have emailed them twice asking the same question about their damages claim and have not had as much as the courtesy of a reply in some weeks. This gives me a very bad impression of the company's attitude towards its small shareholders. OK I admit that I haven't quite had a hissy fit and sold, mainly because their damages claim is due to be heard this summer so it's not long to wait now to see whether this punt will pay off or not.

Then last night I emailed RBN, another company who's performance and share price has been pretty woeful recently. So far I haven't received any acknowledgement at all, although I will give them a bit longer before getting fed up.

So I was wondering what sort of success rate do others have at getting responses from companies they hold share in?

[SteMiS]

I don't generally contact companies because there is a limit to what they can tell you, but I've recently had cause to contact two and what then happened then reflects your own experience I guess.

ESP (Empiric Student Properties) - after a little delay got a polite and very helpful reply from the new FD about the basis of one of her comments in the company results.

GATC (Gattaca) - emailed the chairman about the share sale by the COO just a month before a profit warning. Despite a follow up email, got no response at all.

Generally in the past I've had little luck contacting non execs but, then, they are just there for the free lunch and easy money. You can't expect them to actually do anything...

[Dod101]

I quite often contact investment trust chairmen and nearly always get a response from the chairman within a couple of weeks or so,

I recently attended the AGM of HSBC and was not given the opportunity to ask my question so I followed it up with an email to the Investor Relations people. I got a prompt acknowledgement and following their enquiries a very helpful response.

Last year I also attended the AGM of Unilever and the Chairman closed the proceedings by inviting further questions to be directed to him. I did so and was surprised that within a couple of weeks I got an email certainly with his name on it so I assume he wrote it.

I think it is always worthwhile and as you say a test as to whether they are interested in small shareholders.

Dod

[Pendrainllwyn]

In some cases the company may not know for sure whether someone is a shareholder or what their motives might be. In the case of Gattaca is it possible they might think you are a journalist (not saying you are) fishing for a story? The sensitive nature of the enquiry might make them wary.

May I ask whether their non-response made you re-think your investment?

Pendrainllwyn

[WickedLester]

GATC (Gattaca) - emailed the chairman about the share sale by the COO just a month before a profit warning. Despite a follow up email, got no response at all.

I would have thought if you had concerns regarding this you'd be best placed to raise them with the FCA (not that they seem to be worth much), although if I'm looking at the same share trade as you then it was relatively small and could probably be explained away without too much trouble.

The recent one that gets me is the £5m sale by John Hornby CEO of LUCE about 3 weeks before the first of a series of profit warnings that have led to a collapse in the price of the shares. They claim it was to settle personal tax liabilities but it was incredibly fortuitous.

[Dod101]

Bear in mind that there only a limited number of opportunities for Directors to sell shares in their company and so maybe it was simply good fortune but you never know.

Dod

[Bouleversee]

Yesterday, I emailed Investor Relations at Dairy Crest yesterday to ask why they had done a placing with institutional investors rather than a rights issue or open offer which shareholders could participate in and thereby avoid dilution of value. I also commented on the minute increase in dividend which they claimed was in line with their increasing dividend policy.

I have just received the following reply from the person I think is the Company Secretary (haven't yet checked):

"The intention of yesterday’s placement was to raise a specific amount of money to fund the future growth of the company. The proceeds will be used to expand capacity for cheese and whey production at Davidstow to help support the continued growth of Cathedral City both in the UK and abroad. While there will be a temporary dilution in earnings, we have committed to maintaining a progressive dividend per share.

The level of debt on the company’s balance sheet has been weighing on investors’ minds, and also the share price, in recent times and it is our expectation that this pressure should now start to ease. "


I hadn't queried the reason for the placing and knew what that was but she doesn't address and answer my question, does she? And I don't know what she means by a temporary dilution in earnings.

i have attended quite a few AGMs in the past (no longer) and written a few letters/emails but have come to the conclusion that most companies care little about their investors who are only there to carry the risk while the bosses reap the rewards.

Incidentally, the s.p. dropped quite a bit yesterday, as I expected it would.