Fairfax appoints Walker to board in a major event
Annie Lawson
January 14, 2008
Annie Lawson produced this story for The Age after the controversial Fairfax appointment of Ron Walker as a director at the 2002 AGM.
John Fairfax Holdings yesterday confirmed widely speculated changes to its board line-up, although the appointment of Victorian entrepreneur and former Liberal Party luminary Ron Walker caused some shareholder dissent at the annual meeting in Melbourne.
Shareholder activist Stephen Mayne voiced his concern at the apparent lack of media and advertising expertise of the newly appointed directors and his views were echoed by other shareholders.
The effect of the advertising slump on Fairfax's profit dominated the meeting, but chief executive Fred Hilmer said the recovery that seemed to be on the way would underpin earnings growth in the first half of the 2003 fiscal year.
"While we cannot predict results with any certainty, advertising revenues are up marginally year on year, with the trend improving over the last month," Mr Hilmer said.
He forecast 15 per cent growth in earnings before interest and tax for the first half, compared with the corresponding period last year.
Fairfax, owner of The Age, posted a 58 per cent slump in net profit to $53.66 million for the year to June 30, a reflection of what has been described as one of the worst advertising markets in more than a decade.
The appointment of Mr Walker, also noted for his role as former Victorian major events coordinator, was the subject of spirited discussion at yesterday's proceedings.
He will assume the directorship in January next year, and be joined on the revamped board by Qantas chairman Margaret Jackson and Woolworths chief executive Roger Corbett. Former Coca-Cola Amatil chief executive Dean Wills was named as Fairfax's new chairman.
While there was some concern about the workload of Ms Jackson and Mr Corbett, Mr Walker's level of board experience, combined with his past criticism of The Age, emerged as key concerns.
Defending the controversial reconfiguration of the board, departing chairman Brian Powers insisted Mr Walker was a man of "high integrity".
His appointment is expected to give Victoria stronger representation on what has been a Sydney-centric board. Mr Walker is a former director of casino group Crown and is now chairman of the 2006 Commonwealth Games Committee and the Australian Grand Prix.
"He knows Melbourne as well as anybody - a huge promoter and boost to Melbourne both nationally and internationally," Mr Powers said.
Reflecting on his five-year tenure as chairman, Mr Powers said he regretted not having made a large acquisition during his term.
"I would have loved to have seen a large acquisition . . . but that's my own misgiving," he said after the meeting.
Earlier, Mr Powers conceded that, in hindsight, he would have approached the loss-making f2 investment differently.
His successor, Mr Wills, brings with him a thirst for acquisitions, a reputation he plans to uphold as the new Fairfax chairman. But media ownership restrictions have limited Fairfax's growth options and it is unclear whether legislative changes will gain Senate support.
Mr Powers said there would be more room for growth by acquisition now that Fairfax's major capital commitments had ended on completion of the Tullamarine print facility in Melbourne and the upgrade of the Chullora plant in New South Wales.
He repeated the company's ambitions to move into television, noting this was virtually impossible under the present regime.
Fairfax shares climbed seven cents to $2.94 yesterday.
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