In percentage terms the gain was roughly the same, but in actual cash money, it was still short of Wednesday’s sharp, 36.5c fall.
But the surprise announcement yesterday of the departure of Futuris Corporation CEO, Les Wozniczka, halted the rot in the company’s shares and the 28c rise to a day’s high of $1.295 went some way to repairing the financial damage. The shares closed at $1.19.5, up 22.5c or 23% on Wednesday’s close.
It was in fact a strange announcement because the CEO and his chairman, Stephen Gerlach had together done a stockmarket briefing interview for corporatefile on Wednesday and there was no sign of any difference.
So it must have been a tense meeting between the two late yesterday after the market closed and the damage to the share price was clear to see. Someone had to go.
And seeing chairmen make and unmake CEOs and Mr Wozniczka had been at the helm for five years, it fell to him to fall on his sword.
"Following the disappointing revised earnings guidance announced to the market yesterday, Les Wozniczka and I have had discussions about the initiatives that the company needs to take for sustainable earnings growth and to achieve satisfactory market recognition for the value of its core businesses," Futuris chairman Stephen Gerlach said in a statement from Futuris to the ASX yesterday morning.
"While there is general agreement between us on the steps that need to be taken, Les has come to the view, and the board agrees with him, that it is time for a new leader to drive that process."
The announcement came at 10.08 am, 8 minutes after trading, but the shares had already moved from Wednesday’s 97c to an opening of $1.02.
The CEO will stay on until a new CEO is found, but the company will have to handle the 20% downgrade to 2008 earnings, which was at the heart of Wednesday’s statement to the ASX.
Futuris cut the forecast for the 2008 underlying net profit to between $80 million to $85 million, from its earlier guidance of $100 million which was made on May 6.
The profit downgrade shocked investors who wiped $285 million off its market value, selling down its shares by 27%.
Mr Gerlach said in the statement that financial markets had not been convinced of the merits of the initiatives undertaken by the company.
"Shareholders are rightly disappointed with the resultant share price performance as are we," he said.
"In the eyes of the market our company has not made satisfactory progress on building the core businesses and reducing debt through the realisation of the substantial capital tied up in non-core and underperforming businesses and assets.
"We are now mutually agreed that it is in the shareholders’ interests that a fresh set of eyes and new leadership be brought to the Futuris management team."
Mr Wozniczka said he took full responsibility for the market’s assessment of the company.
"I have worked hard to put together many pieces of the jigsaw that will ultimately make up a very successful diversified agricultural services business, centred around Elders, and would very much have liked the opportunity to finish that picture," Mr Wozniczka said.
"However, it has become increasingly clear that the market is looking for a different approach to the same task and recent share price performance, especially after yesterday’s earnings revision, suggests that I no longer have the market support needed to carry on."
Futuris sells a lot of tax-driven Managed Investment Schemes, especially for tree plantations and the sale sof those have dropped as the stockmarket and credit slump has created more losses for investors.
It is the second CEO Mr Gerlach has seen off this year: John Ellice-Flint was Santos’ CEO for around seven years but revealed in late March a sudden desire to depart, which he has.
Mr Gerlach should know that if there are any stumbles at either company from now on, the market will be looking to him to do the honourable thing.
