As a supportive partner, we have consistently encouraged the Company to maximise value and returns to shareholders. The results have fallen short of our expectations. In the approximately five years since our January 2019 investment in Parkland, the Company has underperformed the S&P/TSX Composite Index by 4.8% per year for a lackluster total annual return including dividends of 6.8% – and that is after a near 33% return since January 2023. Excluding this most recent period, the annual return to shareholders over a four-year timeframe was negative 0.3%. In contrast, in the five years prior to our investment, Parkland generated an annual return of 18.8%, representing a meaningful and exemplary outperformance vs the index of 14.5% per year. We believe that the Company has stopped pursuing its previous strategies that made it such a compelling investment, and the market seems to concur with our view.
We have shared our concerns as long-term investors at both the Board and shareholder level. However, the Company appears disinterested in constructive feedback or recommendations for improvement from shareholders. This has compelled us to change our approach to protect our investment and our shareholder rights.
We continue to believe in the potential of Parkland and the excellent teams who run the underlying core businesses. The Company has a first-class asset base with attractive growth opportunities. Significant value can be unlocked with the right stewardship of these teams and assets. As such, we would be open to participating in a transaction that would provide Parkland shareholders with the opportunity to exchange their shares for shares of another operator committed to pursuing value creating strategies for shareholders, optimizing the Company’s core assets and competencies, and executing disciplined capital allocation.
We would welcome the opportunity to discuss our value creation thesis with potential partners.
Simpson Oil holds 34,444,050 common shares in the capital of Parkland, representing approximately 19.72% of the issued and outstanding common shares.
SOURCE Simpson Oil Limited
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