Diploma dodges board spill

Diploma Group has avoided a second strike at its annual general meeting, with the vast majority of votes cast in favour of adopting the Perth construction firm’s remuneration report.

More than 90 per cent of eligible votes endorsed adopting the pay plan. Shareholders also voted to re-elect Dominic Di Latte as a director and to appoint BDO Audit as auditor of the group.

Diploma faced a resounding rejection of its remuneration report at its annual meeting last year with 86 per cent of votes rejecting the plan, although the dissenting votes came from only 7 per cent of shareholders; more than two-thirds of the total votes were received as abstained.

A vote of at least 25 per cent against the remuneration report this year would have seen a second strike recorded against Diploma, paving the way for a potential board spill.

Managing director Nick Di Latte said the $25.5 million loss Diploma recorded last financial year was “unacceptable” and said Diploma had taken a number of steps to reduce its costs, including reducing salaries and cutting back on staff.

Diploma attributed the loss to a large number of defaults on Diploma apartments purchased off the plan prior to the global financial crisis, as well as the group’s decision to exit the United Arab Emirates and write off the value of its investments there.

Mr Di Latte said the UAE “ultimately proved to be a difficult environment to undertake business in”.

Diploma secured a $44 million contract from Rio Tinto to design and construct a 198-room fly in, fly out workers camp in the Pilbara in July but Rio have since indefinitely postponed the Rocklea Palms project, deeming it “non-essential”.

Mr Di Latte said a separate workers accommodation project in the Pilbara which Diploma has also been commissioned by Rio to undertake, Wickham Lodge, will still go ahead.

Diploma shares were steady at 4.6 cents at close of trade today.