Simonds, founded in 1949, is one of Victoria’s largest residential builders. It was publicly listed in 2014 at $1.78 a share, but the current share price has dropped to just 14.5¢. Despite its long-standing presence in the construction sector, investor confidence has steadily declined. NEX, based in Newcastle, invested $17 million since 2016 but has seen limited returns and little strategic alignment, particularly after a second consecutive strike on executive pay and governance standards.
NEX led opposition to Simonds’ most recent remuneration report, criticising a lack of transparency, falling shareholder value and payments to board members that it claims are excessive. These include a $500,000 annual payment to a board member for a builder’s licence and a non-executive director earning $450,000 a year. NEX has questioned the logic of high compensation while dividends are minimal and the share price continues to weaken.
While shareholders are voicing concerns, the Simonds family retains significant control with around 75% ownership. Governance rules prevent the family from increasing its stake by more than 3% annually unless they offer to buy out the company. NEX has encouraged such a move. A recent shareholder vote allowed the board to issue up to 10% more shares, granting it extra financing flexibility, though a vote to spill the board appears unlikely to succeed due to the family’s dominance.
This conflict comes as both Simonds and NEX work to expand in Victoria. NEX previously bought Arden Homes, a boutique sustainable builder, in an effort to boost its presence in the market. However, after Simonds rejected proposals for joint growth, NEX is now reassessing its strategy. Simonds has continued with its own plans, announcing the $10 million acquisition of rival builder Dennis Family Homes earlier this year.
While Simonds seeks to promote a vision of long-term growth, its standoff with NEX reflects wider concerns around governance in founder-controlled listed companies. The final outcome remains uncertain, whether it results in a buyout, ongoing tension with shareholders or broader changes across the building sector.
