Macmahon protest vote after downgrade

Macmahon Holdings shareholders have registered their displeasure with the company’s poor finance performance, with nearly half voting today against the granting of performance rights to managing director Ross Carroll.

Business News understands that Leighton Holdings, which holds a 19.5 per cent stake, was among the shareholders that voted against the scheme, on the basis it was overly generous.

The vote came after Mr Carroll downgraded the company’s revenue projections in response to contractual problems it is facing in Mongolia and the “tightness in the current market, which has resulted in a shortage of new work”.

The company has revised its forecast revenue for the 2015 financial year to a range of $750 million to $850 million, down from $750 million to $1 billion.

In the 2014 financial year, it recorded total revenue of $1.02 billion.

Macmahon has been in a standstill with Mongolian company Erdenes Tavan Tolgoi since August, after the mining contractor claimed it was still owed $US30 million for mining services it provided at ETT’s Tavan Tolgoi coal project.

The standstill agreement has been extended several times up to November 3, with no outcome.

Mr Carroll said today the company was still endeavouring to negotiate a commercial settlement rather than resort to formal arbitration.

Meanwhile, there was a substantial protest vote against several resolutions at today’s AGM.

Directors Barry Cusack and Vyril Vella were both re-elected, however 12 per cent of shares were voted against the re-election of Mr Cusack while 9 per cent voted against Mr Vella.

The company told last year’s AGM that Mr Cusack planned to retire, but is still working on finding a suitable replacement.

His planned retirement is part of a process that has seen several long-serving directors leave the board.

In contrast, only 1 per cent of shares were voted against director Eva Skira, who joined the board three years ago.

The biggest protest was over the granting of 9.5 million performance rights to Mr Carroll, with 47 per cent of shares voted against the resolution.

The scheme has an open-ended value, however the board has retained discretion to cap the benefit to Mr Carroll.

Only 6.7 per cent of shares were voted against adoption of the remuneration report.

Macmahon achieved a net profit after tax of $30.4 million for FY14, up from a $29.4 million loss in the previous financial year.

Macmahon shares closed 2.1 per cent lower at 9.2 cents per share.