DS Smith plc September 5 2017

Home » DS Smith plc September 5 2017

Disclaimer: These are excerpts from student assignments conducted as part of a Corporate Finance class. The opinions represented do not necessarily agree with mine. I do not vouch for the quality of the recommendations or the accuracy of the numbers. Follow the recommendations on your own risk.

Students wonder what was behind recent director turnovers, point out missing inside expertise but applaud general competence #directorelections #board

Students concerned with high #debt levels. Interest coverage ratio dangerously low. Why still pay #dividends?

Given high #leverage and low interest #coverage students recommend voting for issuing #equity to finance #expansion, against #repurchases

Proposal Excerpt of Student Recommendations
For Against
(2)Authority to allot shares
  • Group should increase the equity ratio in its capital structure in time for long-run growth
    Currently unable to cover its debt with its net cash flow: necessary to allot more shares to achieve an improvement in financial situation and rating
    Necessary for expansion plan.
  • Gives too much power to management. Important to give pre-emptive rights
(3)Authorization of share repurchases
  • Gives management flexibility to take advantage of low prices
  • Debt-to-equity ratio already high, possibly too risky to spend more cash on repurchases

Link to proxy statement:

http://www.dssmith.com/investors/annual-reports/notice-of-meeting

 

Video:

https://v.qq.com/x/page/l0537yqsen9.html