MARC HASENFUSS: From insomnia cure to wake-up call

I started attending company AGMs in the early 1990s out of sheer necessity. I worked for the Cape Argus; it was an afternoon newspaper at the time, which meant the rival Cape Times tended to get first bite at most company results and news for its morning edition. An AGM, especially one convened in the morning or early afternoon, afforded me an opportunity to get one over the Cape Times business writers by filing for one of the three afternoon editions.

The problem was that AGMs tended to be officious, five-minute affairs, mostly poorly attended. Shareholder activism barely existed. Fortunately, my job was made considerably easier by the Shareholders’ Association of South Africa, headed by the legendary Issy Goldberg. Issy was to company AGMs what television detective Frank Columbo was to crime — rumpled and slightly bedraggled but shrewd and totally determined.

Issy could be unrelenting, often driving directors to the point of exasperation. But he fought relentlessly for shareholder rights. His finest moment, in my opinion, was securing the markedly raised buyout price when Tafelberg Furnishers went private. Issy took the directors into an anteroom in one of the Tafelberg Furnishers outlets in Cape Town’s northern suburbs and thrashed out a better deal.

He could be amusing too. Issy once threatened to put the CEO of a fizzling family-controlled business over his knee. At a Spur AGM, Issy belted out a discordant aria when the group announced its pizza-pasta brand Panarottis … much to the chagrin of founder Allen Ambor.

Theo Botha — who is much missed — later took up the cudgels as the main shareholder activist. Botha was often perceived as pedantic. When he raised his hand at an AGM there would often be a collective sigh of dismay from the board and attendees. Of course, some of those pedantic inquiries pointed to serious pressure points — the old Super Group and life assurer Sage spring to mind.

Thankfully, activism at AGMs, or robust participation at least, is now far more common. Perhaps there’s a realisation that the AGM is the one time that shareholders, especially now that we have the convenience of online attendance, can properly engage management. I was delighted to see the latest South Africa AGM Season Review from Georgeson, which is part of Computershare’s investor engagement operation.

The review showed four board-proposed AGM resolutions rejected by shareholders in 2025 and that 36 of the JSE’s top 40 had at least one contested proposal (more than 10% opposition). The overall number of contested resolutions rose from 91 in 2024 to 110 in 2025, and the percentage of resolutions contested increased from 10.2% last year to 10.8%.

Thankfully, activism at AGMs, or robust participation, is now far more common

In the top 40, there was an 8.3% drop in the number of contested director elections (also more than 10% opposition) since 2023. But in terms of absolute numbers, these votes accounted for the biggest slice of contested regular resolutions. Also significant was that the percentage of remuneration policy votes that were contested rose from 44.1% (15 reports) in 2024 to 48.5% (18 reports) in 2025. Interestingly, only two remuneration-related resolutions failed (markedly down from seven in 2023), which Georgeson suggests stems from companies addressing investor concerns more successfully ahead of the votes.

Speaking of more vigorous shareholder participation, I’d imagine the next AGM of consumer goods distributor Nu-World could be a testy affair. It’s not like Nu-World is deep in the dwang; the latest interim results were solid enough, with the group turning less than 3% growth in top line into a respectable 11% gain in after-tax profits. With R257m still in the bank and the group well stocked up with winter merchandise, shareholders can probably bank on another decent dividend payout (remembering Nu-World covers the dividend 2½ times by earnings).

The problem, though, is market perception. Earnings are still well off historic highs, and return on equity and return on assets have slipped to worryingly modest levels. The share — afforded a low- to no-growth rating of a 6.5 earnings multiple and a 5% yield — has gone nowhere in five years. In late April 2021 the share was at about R29.50, just a little higher than the ruling share price at the time of writing.

Dividends can provide comfort, but not enough to compensate for the gaping distance between a R29 share price and a hard NAV of R68 a share. For a company that has been consistently profitable and dividend-paying for close to four decades, this is a deeply sceptical, perhaps even ominous, discount.

I reported in late February that at the last Nu-World AGM there had been pushback from a major backer, Inhlanhla Ventures, which holds a 32% stake. Inhlanhla’s prime mover, David Brouze, has spoken openly about renewal and board refreshment, noting the extended tenures of key directors at the group.

Just how long Nu-World can hold out against calls for change is debatable. For one thing, the underperformance of the offshore operations, which are now a serious drag on the group, needs to be addressed sooner rather than later. Bigger changes are probably worth contemplating too. I have previously pondered whether industrial business Deneb (controlled by Hosken Consolidated Investments), which has a sizeable consumer goods distribution segment, might see merit in advancing on Nu-World.

Others have asked whether fitting Nu-World in with Bidvest’s Home of Living Brands segment would be an inspired fit. With so much value at stake and no apparent catalyst for change, disgruntled Nu-World shareholders might well be banding together for a collective effort to shift things along in the months ahead.