Regular readers will know Humm has been a huge disappointment this year – two failed control processes, a Takeovers Panel declaration, an EGM, a reconstituted Board, and a share price that has gone from 70c to 40c while the business underneath it has done, well, not much at all. The next chapter is the AGM on Friday 20 November (proxies close 10am AEDT, Wednesday 18 November). I have written to the Board at some length on the resolutions, and thought it made sense to update the broader register re my voting intetions, well in advance of the meeting. If you own the stock and want to see value finally realized, please read the table below and then lodge your proxy.
The voting card – how I’m voting, and how I’d suggest you vote
| Res. | Subject | Vote | Why |
| 1 | Re-election of Rajeev Dhawan | FOR | The vote that matters – see below |
| 2 | Re-election of Garry Sladden | FOR | The vote that matters – see below |
| 3 | Adoption of the Remuneration Report | FOR | Not an endorsement; a vote to keep the spill off the floor |
| 4 | Approval of the Incentive Awards Plan | FOR | Vanilla plan, 5% cap, preserves placement capacity |
| 5 | Performance rights to the MD (1.85mm) | AGAINST | A one-year bonus wearing an LTI costume |
| 6 | Renewal of proportional takeover provisions | FOR | Protects minorities from a partial bid |
| 7 | Constitution amendments | FOR | Housekeeping |
| 8 | Conditional spill (only if Res 3 fails) | AGAINST | Shouldn’t be put; if it is, vote it down |
Practically, I intend to vote as per Board recommendations on every resolution except Resolution 5. If you leave the boxes blank, the Chair votes undirected proxies FOR 1–7 and AGAINST 8 – which happens to match the above on everything except Resolution 5. So mark 5 AGAINST explicitly, or your vote on the MD’s grant goes the other way.
Why this isn’t a normal AGM
If we rewind back to May, Abercrombie and Hines resigned, Dhawan and Sladden came on, and Dyson took the chair with Cheadle also being appointed (announcement here). Dhawan and Sladden were Board appointments, not shareholder elections, so under the Constitution and LR 14.4 they have to stand at this meeting. Note that Dyson AND Cheadle have already announced they will not stand for election and hence they will depart the Board after the AGM (a positive, since I had never pushed for them on the Board and they have been entirely ineffectual over the last 5 months).
TAG sits on ~30% of the register. Abercrombie cannot vote on the Rem Report (Res 3) or the spill (Res 8) – he was KMP for most of FY26, his fees are in the Rem Report, and s250R knocks him and every entity he controls out of both votes. This means he cannot (on his own) force a spill vote; but he can vote on everything else, and everything else includes the re-election of the two directors who most obviously embody a Board he no longer runs. I think we have to assume he votes against both. He fought their appointment in substance in May; he has since dragged the Panel to the High Court; and there is no version of events in which the founder votes to entrench the people who replaced him.
So: a 30% block voting no, and the outcome turns entirely on whether the other 70% turns up. In a normal small-cap AGM maybe half the register bothers. If that is the turnout here, Abercrombie wins on the day. It is therefore imperative that everyone who wants the non-Abercrombie directors to stay – and wants the Board free to restructure this company and sell it off in pieces – actually lodges a vote. A sympathetic shareholder who doesn’t vote is, functionally, an Abercrombie vote. I cannot put it more plainly than that.
What a win looks like
I am quite positive at this point, not only because I think Sladden and Dhawan likely remain on the Board, but also because the pro-forma Board should be as conflict-free as it has ever been. The Board is would become Dhawan, Sladden, Fleming, Darbyshire and the MD, Demasi. One name on that list is left over from the old regime: Andrew Darbyshire (recall Fleming, too, but she was pro a sale in the Takeover Panel proceedings and hence I think is not a problem going forward).
Now, keep in mind that earlier this month it was reported the Company has brought in Gilbert + Tobin to run a governance review covering, among other things, complaints concerning Mr Darbyshire – this alongside the Federal Court claim the former CEO (Grimshaw) has filed against the Company and Abercrombie (coverage here and here). I express no privileged view on the merits of any of it; that is what the review and the court are for. But my expectation is that, with a stable independent majority in the room and that process running, Darbyshire does not stay on the Board for long after the meeting.
If I am right, you get something that has never existed in this company’s listed life: a Board fully clean of Abercrombie influence. Every strategic decision Humm has made since the 2006 IPO was made with the founder at the table, and usually at the head of it. What clean air buys you, in my view, is a break-up – the case I made in the June letter and which the Credit Corp process falling over has only strengthened. I would expect a Board free to act to go roughly like this:
- NZ cards goes first – cleanest asset, easiest sale, record volume this year;
- Commercial is sold, orderly, to a strategic owner – I still have it at 70c+ per share on its own;
- Canada is wound down or exited – subscale and eating capital; and
- Quite possibly, Credit Corp is re-engaged on the residual Consumer book, now that the governance objections that killed round one are gone.
At the same time, a founder who has spent two years and a lot of money trying to take this company private at 58c, and still owns 30% of it, is not going to sit on his hands while it gets sold in pieces to third parties at prices he could have paid himself. If the break-up starts, I think it is more likely than not Abercrombie is forced back to the table: a fresh bid, or creeping again when the window reopens in January (or one then the other). Either way it is good for sentiment, and either way it starts from ~40c rather than the 65–70c the last round was fought at.
The value case hasn’t moved; the price has
NTA at 30 June was 82c (FY26 4E). Underlying EPS was 8.8c on the Company’s own review-of-operations basis and I continue to think normalised earnings power is 8–10c once the ~A$19mm of “irregular” costs stop recurring (lawyers, Panels, EGMs). Commercial is seasoning but credit is fine; NZ cards had a record year; Ireland and the UK are growing; NIM went up. The business is unimpaired. This is, and always has been, a governance story.
That doesn’t make it riskless – governance stories go wrong, and this one has certainly been incredibly painful for most of the year. But the risk/reward at 40c, with book at 82c and earnings at 8–10c and the structural impediment to value potentially gone inside a month, is a very different animal from that at 65–70c going into the last meeting. At 40c you are paying half of book for a business earning a mid-single-digit yield on that price in a bad year, with a free option on the register unlocking. I find that attractive, and I am positioned accordingly.
On pay – why I’m voting FOR a Rem Report I don’t much like
My (private) letter to the Board was fairly direct on this so I will keep it brief. The MD got a $412,500 cash STI (55% of target) in a year the Company’s own profit measure was marked “Not Achieved” and the stock fell 18%. The Board rewrote the LTI hurdles on 26 May – five weeks before year-end – swapping Cash EPS and RoCE for softer “underlying” measures, after which 78% of the outstanding rights vested. There is an undisclosed cash retention payment landing in February. And the Rem Report states FY26 TSR was +6.69%, on the same page as a table showing the share price going from 57c to 47c with 2.3c of dividends, which on my math is roughly minus 13.5%. I have asked the Board to publish the calc and, if it is wrong, to correct it and say what that does to the FY26 vesting. We will see.
So why FOR on Resolution 3? Because Humm took a first strike last year (55.5% against) and a second strike this year puts the spill resolution on the floor. With Abercrombie and every director excluded from both votes, a spill could pass on a very small number of shares. I am not prepared to risk blowing up a five-month-old Board that I support – and that is, I think, about to do the right thing strategically – in order to make a point about pay I have already made in writing. A vote against Res 3, in present circumstances, is a vote against the break-up agenda. Put your rem objection where it belongs: AGAINST Resolution 5. That is where mine is going.
On Res 5 itself: 1.85mm rights to the MD, all three tranches tested on FY27 only, then nothing required in 2028 and 2029. The EPS target is undisclosed; cost-to-income threshold is measured on a single quarter only (Q427). Meanwhile, the Board keeps discretion to adjust outcomes upward – and it sits on top of a cash STI of up to 125% of fixed and a separate retention cheque. I am not against an LTI for Demasi – I would be delighted to see him paid handsomely for executing a break-up – but this one is far too loose and I won’t support it as drafted. Vote AGAINST 5; the Company can come back with a real plan.
If it goes the wrong way
If Abercrombie manages to remove Dhawan and/or Sladden on the day, that is a setback, not the end. I am already working on the alternatives, which in outline are:
- Getting Darbyshire removed and rational independent directors added – by requisitioning another EGM if need be (s249D, 5% of the register, not a difficult number to assemble on this one); and
- Having the residual Board re-appoint Dhawan and Sladden as casual vacancies, which it can do without a shareholder vote and which puts them back in the room until the next AGM.
Neither is as clean as simply winning on 20 November, which is why it is so important to vote!
Relevant Links
- Notice of AGM, 19 October 2026
- FY26 Annual Report / Remuneration Report, 25 August 2026
- My June letter to the Chair on a break-up
- Takeovers Panel reasons, Humm 02R & 03R
- Press on the Gilbert + Tobin governance review
Disclosure: long HUM.AX
Thank you for this update