WOOLWORTHS investors have overwhelmingly rejected a resolution that would have placed more restrictions on the company’s 12,000 poker machines, while chief executive Grant O’Brien said earnings guidance remained unchanged after a pleasing start to the financial year.
It was a marathon final day for Woolworths chairman James Strong, who retired after the annual meeting, which followed an extraordinary meeting called by investors proposing to curb the poker machine operations.
The resolution sought to impose $1 betting limits and revenue limits of $120 an hour per machine.
Just 2.5 per cent of votes were in favour of the resolution but the company’s board was forced to make a robust defence of its involvement in a business strongly associated with problem gambling.
Mr Strong said the board accepted ”absolutely” that problem gambling was a serious community issue and told investors that ”to us the only acceptable form of gambling is responsible gambling. We don’t want our business to be based on problem gamblers.”
He rejected calls from some investors for Woolworths to take a moral stance on the issue. ”In this case, the problem is a radical proposal [being] put forward for one company and not for everybody else in any other form of gambling within Australia. I think we’ve made that point and it remains valid no matter what the arguments are around accountability,” Mr Strong said.
Investors questioned whether Woolworths’ management was being forced to spend a disproportionate amount of time on a business that provides just 2 per cent of revenue and is not core to its business of retailing.
One shareholder asked if the board had considered the potential backlash by its retail customers, especially with the prevalence of social media.
Mr Strong said the company’s hotels were an integral part of its retail strategy as it underpinned its $6.6 billion liquor business through the hotel licences.
”The hotels business has enabled Woolworths to open 59 Dan Murphy’s and 448 BWS retail liquor outlets, many of which are attached to the company’s hotels,” Woolworths said in documents sent to shareholders before the meeting.
South Australian senator Nick Xenophon says he will seek a referendum on proposed $1 betting limits on poker machines after attending the meeting.
Activist group GetUp! – which backed the Woolworths investors who put forward the resolution – said it would continue to campaign against the company’s poker machine stance.
”This fight will continue. Our Christmas campaign materials are already printed,” GetUp! national director Sam McLean said.
”I’m not sure the board and some of the institutional shareholders are going to have a very merry Christmas. By opposing these sensible measures, the Woolworths board and the institutional investors have chosen money over morality.”
At the shareholders’ meeting, Mr O’Brien told investors he was pleased with the company’s start to the 2013 financial year and ”our guidance remains unchanged despite the instability of consumer confidence and some uncertainty in global financial markets”.
Investors strongly supported other resolutions placed at the annual meeting, including spinning off the company’s property portfolio as a separate listed entity.
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