Mark Bouris says Yellow Brick Road ‘misunderstood’ as it plans delisting
Yellow Brick Road chairman Mark Bouris says the “misunderstood nature” of the mortgage broking business is to blame for investors steering clear of his company, and going private is the only way to fix the problem.
Mr Bouris, best known for his work on reality business show Celebrity Apprentice Australia, also defended his remuneration – more than $1 million per year, despite Yellow Brick Road’s market capitalisation of just $19 million – saying he could earn “twice that amount of money” elsewhere.
Yellow Brick Road Home Loans executive chairman Mark Bouris. Michael Quelch
Yellow Brick Road on Monday detailed its reasons for pursuing a delisting from the ASX, and will offer existing investors the chance to buy shares at 5.5¢ if they want to remain invested in the unlisted company.
A delisting would cap just over 15 years on the ASX for Yellow Brick Road, which was floated in February 2008 at $1 per share. It last traded at 5¢.
Around 62 per cent of issued Yellow Brick Road capital is held by four shareholders, and this is distorting liquidity and leading to a share price undervalued by as much as 56.7 per cent, the company said in a statement.
“There are examples of trades of as little as $7000 of Yellow Brick Road shares in a day where the share price has closed down by 1¢, which results in a reduction of Yellow Brick Road’s market cap by circa $3.3 million,” the statement read. “These matters are having an unacceptable effect on the Yellow Brick Road shareholder value.”
Mr Bouris said the depressed share price was because there was a lack of understanding of its commission structure and liquidity challenges.
While the company has made cash profits, accounting adjustments means it has been writing down its operating
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