New Alloy Steel CFO Barry Woodhouse called me Wednesday night, mainly to confirm our call rescheduled for next Monday night my time / next Tuesday morning Perth time, and to make sure he had the correct number. Barry also asked for an idea of the sort of shareholder questions I’d bring up in the call, so I directed him to the comment thread of this post, Questions for Alloy Steel’s CEO and new CFO. If you have any questions for the company that haven’t been posted in the comment thread there that you’d like me to ask, please leave them in the comment thread of that post.
During our conversation, I also mentioned to Barry the general problem with shareholder communications at Alloy Steel up until now: essentially, the company has raised expectations in the past with announcements of future developments, and then declined to provide updates or explanations about those developments in subsequent quarters. An example was the the discussion about building mills beyond the first two in Western Australia, which was followed by an announcement of building manufacturing capacity in Indonesia instead, with no detail about whether the Indonesian mills would be in addition to or instead of the proposed mills in Western Australia.
Barry said he understood how shareholders could be frustrated by not receiving updates on previously mentioned developments. He said he’d try to review past shareholder communications before our call next week. The impression I got from my brief conversation with him is that Barry intends to improve shareholder communications going forward. We’ll see.
I didn’t mention this during my conversation with Barry Woodhouse, but I’d estimate that about half of the drop in Alloy Steel’s share price since the quarter was filed has been due to the lack of shareholder communications. The stock would have of course dropped regardless due to the steep sequential drop in earnings and margins, but I think the drop was as steep as it was because of a lack of confidence in the company’s future prospects engendered by a lack of follow up about promising developments mentioned in the past (e.g., capacity expansions to meet increasing demand, backlog, etc.).
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
