Wellard’s Klepec new chairman at changing Fleetwood
Source: The West Australian. By: Sean Smith. The chief of live exporter Wellard, John Klepec, is taking the chairmanship of Fleetwood in the latest st...
Sandon Capital saw the potential for a turnaround in FWD’s performance with a change in governance and a strategic shift in operations and capital management. Specifically, it needed the right Board composition to: support a focus on becoming a manufactured accommodation specialist; sell or close business units unable to earn acceptable returns through the cycle; and make significant changes to capital management.
By becoming a substantial shareholder, Sandon Capital believed it could influence this strategic change to unlock the company’s intrinsic value.
September 2015
~$1.40
Sandon Capital campaigned for Board and management changes, the sale of non-core assets, and improved management and governance.
To prompt action, in 2016 Sandon Capital went public and published analysis showing poor operational performance, a lack of strategic focus and making recommendations for change. The analysis and commentary were followed by a number of private engagements with the Board.
The publicity helped galvanised action with shareholders. Initial Board changes were achieved in 2017 with a number of directors stepping down including the Chairman.  Management, however, remained entrenched despite continued poor performance.
Following the proposals set out by Sandon Capital, FWD sold off underperforming business units, albeit far too slowly. The Bocar/Flexiglass automotive accessories business was finally sold in February 2018, along with the caravan manufacturing business in August 2018. This took much longer than it should have, and significant capital was burnt in a futile exercise to turn around these non-core assets prior to their sale.
Continued underperformance finally resulted in more shareholders concurring with Sandon Capital’s analysis and ongoing activism. Substantive changes to the Board and management occurred in late 2020/early 2021 when the CEO/MD resigned and the Chairman retired. Sandon Capital supported their replacements.
The new management of FWD recognises the challenges and opportunities it faces. FWD is now on a firm footing, with a strong balance sheet, a refreshed and capable Board and management team and a plethora of internal and external initiatives to drive growth.
FWD is one of the largest position in portfolios managed by Sandon Capital and is one of the investments we are most excited about. Whilst the market is focused on the short-term impact of pandemic driven lockdowns on FWD, we believe there are a number of large and long duration opportunities that could see many years of earnings growth ahead.
The Board now has widespread shareholder support, and mooted operational improvements have the potential to yield significant improvements in financial performance and be supported by strong economic tailwinds.
Source: The West Australian. By: Sean Smith. The chief of live exporter Wellard, John Klepec, is taking the chairmanship of Fleetwood in the latest st...
Source: The West Australian. By: Sean Smith. Fleetwood’s chairman is following its chief executive out of the company after suddenly disclosing depa...
Source: The West Australian. By: Ben Harvey. Speculation was mounting last night that activist investment fund Sandon Capital was the substantial shar...
Source: Barron’s Asia. By: Daniel Shane. Shares in Australia’s Fleetwood Corporation ( FWD.AU ) have looked feeble since the Lucky Countryâ€...
Past performance is not indicative of future performance. The content of these case studies constitutes the views and opinions of Sandon Capital. They have been prepared without taking into account the objectives, financial situation or needs of any particular individual. The case studies do not constitute advice.
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