1st Quarter Report and changes in leadership etc First, the 1rst quarter revenues were, to many, a disappointment, considering that the China Zero Covid policy ended (after 3 years) at the end of 2022. Some say you can’t use that as an excuse. However, China was in no way ready to "re-open" when they ended the Zero Covid Policy. Its economy didn't just go back up to full speed the next day. It has been, and still is a slow process to get the Chinese economy back on its feet again. The first couple of month things improved very slowly. They are now doing a bit better every month but they are still having trouble with supply chain issues, with being able to get enough workers (just like in may sectors in North America), and getting people to go back to restaurants, shops etc, - just living their lives as they did pre-Covid. But they will get there, and as they do PKKs businesses in China will pick up and PKKs China revenues will once again start growing and become stellar. Also, as a side note, PKKs first quarter Chinese revenues the traditionally the weakest of the year.
Secondly, as to replacing JJ as CEO with acting CEO Carol Penhale, and the boards plan going forward.
I at first did not know what to think about this, but after looking at the situation with a bit more thought I do believe that it was indeed not only the right decision, but what had to be done. Should have been done sooner.
Even in the past, watching JJs interview always kind of bothered me. He had big visions, yes, and in different circumstances, (no Covid) who knows things might have turned out better for him and the company. He over promised, under delivered. Had lots of enthusiasm but did not seem credible. We need a CEO not a cheerleader.
I just watched Carols’ Interview from May 24th and was very impressed by her in almost every way.
Her reasons why the board replaced JJ seemed reasonable and credible. She is working hard, developing a credible business plan based on due diligence and reality (not pie in the sky dreams), working on financing options (she has a background in corporate financing) and is developing a trust with the financial community and exploring all financing options (some simple and some more complex) – To help get the support of the financial community the board is now bringing costs of running the Canadian operations to a reasonable level (lowering the “burn” rate). I think we all knew that PKK could not keep spending at the rate it was on the Canadian side of the business with no Canadian revenues. She says they have to run it as a startup business instead of as a Mature business.
The board is looking at all aspects of the business both in Canada and in China. Looking at what is working and what is not. Not making arbitrary decisions but said decisions are being made prudently based on what has to be done now and what has to wait. Looking at different situations as to whether it is better to Build, vs Buy, vs Outsource and what makes sense for the company.
They are developing a credible operational Business plan which is nearing completion. Working extremely hard to get an idea of what is here, what they should prioritize and what they should re-calibrate.
She is forming trust with business partners. Not exaggerating the facts, and using full, true, plain, and transparent disclosure, and with that diligently looking for the best financing options for the company and the shareholders.
She seems Smart, Solid, Honest, Genuine, Hard Working, Business like, Sincere. and focused on getting the company back where it should be all the while being while being realistic and managing expectations. In other words she is acting like a real CEO.
She said she and the other directors came to PKK because they believe that something special is possible here. She said that though there is lots of work to do, she and the rest of the board still believe that and that is why they are still here.
Below is the URL address from the interview. She is asked some hard questions and I was in all cases I was impressed with her honest and straightforward answers. If you haven’t yet watched it, you should. Don’t make up your mind without checking it out. Cheers.
https://youtu.be/jlWkZsukO48