I attended the DDR AGM in Kurnell yesterday and wanted to share my takeaways while they’re fresh.

David Dicker, CEO was not there in person, zoomed in on video instead as he’d received a death threat if he turned up due to share price being down (a brave but anonymous warrior in Elon’s Twitter army I suspect). This was initially met with a few chuckles from the audience but seems it was legit, the police turned up but there were no scuffles, shots fired or arrests that I noticed.

David took the opportunity to emphasis that he had not wanted to sell any shares and only did so under the obligation of a highly unfavourable divorce judgement.

So timing was seemingly out of his hands too?

Presentation

This went for about an hour – led by David, followed by Exec Directors Mary the CFO and Vlad the COO.

Overarching theme was that business conditions are tough across ANZ at the moment, which doesn’t bode well for the remainder of 1H 24.

Vlad made the point that DDR has historically taken market share in up and downturns but this usually is faster in downturns.

They seem to think about the business like owners (because they are) so a little unorthodox in some of their presentation / thinking but mostly in a good way.

Moat seems to be largely cultural and defensible (operating efficiency is a big feature can't really be a moat as this can be copied by competitors).

CFO

Cycling difficult comps – specifically they were a big beneficiary of Covid IT demand in FY21, then impacted by supply chain issues in FY22. These resulted in a big pcp for Mar-23 Qtr when a lot of the high demand, then low supply from FY22 worked its way through, a lot of which got invoiced in Q1 23. This made Q1 24 Revenue hard to comp on a like for like basis.

My take is that they are confident that better times are coming but probably not in Q2, hopefully H2.

Dividend policy to pay out 100% of NPAT on a quarterly basis to fund the F1 ambitions of all shareholders will not be changing while David remains alive / a shareholder.

COO

NZ is seen as a big opportunity in terms of both market share (they are 2^nd) and margin as they work through the acquisitions they made there.

They are looking to sign ANZ vendor and partnership agreements as opposed to being siloed to leverage the strength of the Aussie business to expand the NZ arm.

That said, the NZ economy is doing it tougher than here.

Digital is a larger piece, growing steadily, higher margin and expected to continue for the foreseeable.

Official business

The unorthodox Rem Report got a 2nd strike but the spill was easily defeated.

Given David's attitude towards it, I expect this to be a feature - lots of strikes but no spills to protest but not punish the board / Rem & Nom committee.

Site Tour

Did a site tour afterwards.

The CFO led us through with the head of property mgmt. and about 15 other shareholders, fund managers (I only recognised the Hayborough guys) and punters / brokers?

Kurnell is an Impressive set up, very modern, lots of capacity, and DA being sought to add another adjacent 30k sq feet (in addition to the 22 + 17 = 39k sq foot facilities they have currently operational but not fully utilised.

Disc: Held