Escrow and efficiency keywords for RMG

Around 337 million shares are subject to escrow expiring on June 20, causing some concern in the market that such a high number could damage the company's share price.

However the company has told shareholders at its AGM that negotiations with vendors are well advanced to provide for the extension of the escrow period on the on the majority of the vendor shares for a further year.

The shares in question have been issued to the companies that now make up the RMG group.

Meanwhile newly appointed CEO Jim Boult, formerly of Baycorp (NZSE: BCH), told the meeting that he wants to boost profit by improving efficiencies in the business.

"What hasn't been achieved in RMG to date is the operational efficiencies which should have flowed from the roll up and which were envisaged at the time of the float.

"One of my goals will be to ensure that the measurement of our operating costs, as a percentage of our revenue, continually drops to demonstrate that we are continually working to become a more efficient business unit, providing greater value for its shareholders."

Mr Boult says there although the company will be selective about future growth opportunities, one that it plans to pursue is the acquisition of distressed debt ledgers.

"This profitable niche of the industry is well known to me and an area which will provide attractive returns in the future."

The new CEO also reminded shareholders that when he began work at Baycorp the company was in dire financial straits but by taking it back to its core business, streamlining processes and cutting costs, the company became very profitable.

"By 1994 Baycorp had paid off its debt and has become a strong, focused organisation with a well considered strategy. Obviously that background is relevant to my position at RMG."

Mr Boult says RMG's customer base is an important asset because its extensive mix by industry, geographic location and size provides a buffer against industry or regional revenue fluctuations.

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