At the 19th annual general meeting of Cable & Wireless Jamaica (CWJ) held at the Hilton Hotel on Wednesday, the executives reiterated the statement made in the 2006 annual report. "While we have not fully achieved our mission to provide the best customer service in Jamaica, we are working vigilantly ... to make the changes necessary.."
And so, shareholders took the opportunity to vent their emotions in a very lively fashion.

Pay a fee to pay your phone bill!?

Of note, several irate shareholders loudly expressed frustration with the recently introduced $35 user fees added by bill payment providers Bill Express and Paymaster. CWJ executives sought to reassure the angry set of shareholders that there are many other alternatives, such as online payment services, that are still free of cost.

However, the shareholders in attendance, mostly pensioners and mature adults, did not seem mollified and continued to grumble loudly as President & Chief Executive Officer Rodney Davis re-iterated that banks and building societies did not charge for bill payment. He also added that CWJ had run a series of newspaper advertisements outlining the free bill payment options.

Interestingly, Don Wehby who attended the AGM as a CWJ director, is the chief financial officer at GraceKennedy (GK), parent company of Bill Express. And although Wehby sat quietly during the explosion of the CWJ shareholders' displeasure, it is also interesting to note that earlier this week, Brian Goldson, chief operating officer of GK's informational division which includes Bill Express, resigned under mysterious circumstances.

Will profits no longer flow?

Returning to the CWJ AGM, another concern of shareholders was the impact of rival telecommunications company, Flow, on CWJ's profit potential going forward. Davis sought to reassure shareholders that the CWJ of today was not the arrogant monopoly of the decade past. "Flow has been offering [telecommunications] services to commercial clients since last year. We have been able to meet Flow's prices and hold our own. Whenever Flow gets around to launching residential [telephone] services, we will respond competitively."

CWJ Chairman Leonardo de Barros added, "Customers will continue to see lower broadband prices (one of Flow's main thrusts) as long as the demand for the service grows."
Off with his head!

One shareholder then complained about the lack of segment reporting in the CWJ annual report. The company has several business lines - cellular phone, fixed line, Internet based services, and corporate services - but the performance of each is not separately reported. And so the shareholder wanted to know how Davis's performance in each could be measured.

"Sir, I want to know that in the next 18 months, if you don't do well, I can come for your head." To this, Davis replied, "You will have to join that line for my head if I don't meet the company's targets." Davis then argued that it wasn't necessary to report segment performance as it all feeds to the net profit line of the company and that is where it really counts.

Let the numbers speak

In terms of performance for the 12 months ending March 31, 2006, the company boasts improvements in most of their key financial benchmarks. First, the company has a stronger balance sheet. This is evidenced by a reduction in accounts payable from J$6 billion in the 2005 corresponding period to J$5.2 billion by March 31, 2006. Increased working capital of J$800 million in 2005 versus negative J$400 million in 2005. Gross debt of J$7.4 billion in 2006 versus J$8 billion in 2005. And an increase in shareholders equity to J$20.3 billion from J$19.2 billion in 2005.

In terms of sales, the turnover was J$22.5 billion in 2006 compared to J$22.2 billion in the previous year. Dividends of J$1 billion were paid out in 2006 a major improvement from zero paid out in 2005. However, in terms of net profit, the company saw a reduction from J$2.2 billion in 2005 to $2.1 billion in 2006.

With that said, the company is hopeful about the future as they have adopted several aggressive strategies. These strategies form the key initiatives that Davis is "guardedly optimistic about".

1 Level the Mobile Playing Field

2 Satisfy the Explosion of Broadband Growth

3 Re-awaken the Fixed voice business despite the falling margins

4 Retain leadership in providing telecommunications services to corporate Jamaica

5 Deliver world class customer experience.

Mothers can't father

Trousers in Denim

Cream of the 'Crop'