Af­ter a decade, it’s time to move on

Finweek English Edition - - MARKETPLACE HOUSE VIEW - *The writer owns shares in BHP. By Si­mon Brown

Listed al­most 10 years ago at 1 000c, Pallinghurst was sup­posed to be Brian Gil­bert­son’s sec­ond act in the min­ing space af­ter hav­ing built BHP Bil­li­ton* (since re­named to BHP). But as I al­ways warn, sec­ond acts are sel­dom suc­cess­ful and Pallinghurst’s per­for­mance il­lus­trates this.

Di­rec­tors have done very well with mas­sive fees be­ing paid, but with no re­ward for share­hold­ers, the align­ment be­tween di­rec­tors and share­hold­ers has never ex­isted.

There are now prom­ises that this will be rec­ti­fied, but I would be scep­ti­cal.

There is also big talk of turn­ing the com­pany into an op­er­a­tional min­ing com­pany by tak­ing con­trol of Gem­fields. But by now surely share­hold­ers have lost trust in the di­rec­tors?

The share re­mains some 70% off the list­ing price and while the board con­tin­ues to prom­ise bet­ter things in the fu­ture, it has failed to de­liver over the past decade. It is never fun when a promis­ing stock ab­so­lutely fails to de­liver and af­ter a long hold­ing pe­riod, in­vestors of­ten re­sign them­selves to its fate. But in­stead, frus­trated share­hold­ers should sell, take the loss and move on. ■

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