It can be argued that Fortescue Metals Group Ltd’s Andrew Forrest retirement yesterday boosted the value of the company by around $600 million, with some 30% of that improvement flowing to his already huge fortune.
But it can also be argued that another announcement from the company ended up having a bigger impact on the share price yesterday.
Fortescue shares rose 25c, or 3.6%, to $6.77 after the news releases yesterday, but eased to close up 2.6%, or 17c, at $6.69.
A few hours after the management changes were announced, the company revealed plans to boost production to 155 million tonnes of iron ore a year.
That will happen a year earlier than previously planned.
The market liked that news, relegating the move by Mr Forrest to secondary importance.
Under the change, chief operating officer Nev Power will replace Mr Forrest as CEO and current chairman Herb Elliot will step aside to become deputy non-executive chairman and lead independent director.
Mr Forrest will assume the chairmanship at the board’s next meeting on August 18, Fortescue said in a statement yesterday.
"Mr Forrest said his decision to step back from the day-to-day running of Fortescue did not indicate any lessening of his commitment and passion for the company he founded in 2003," the statement read.
"Fortescue is now recognised for its ability to deliver on its targets and, with Nev’s extensive experience and knowledge available to lead the Company, this is a perfect time for me to move away from my day-to-day, hands-on role," Mr Forrest said.
Mr Forrest said he intended to focus increased energy, time and attention on philanthropic activities, particularly assisting to rid Australia of its Indigenous disparity.Proxy votes from shareholders in Tabcorp Holdings Ltd have overwhelmingly supported a demerger of the company’s casinos business from its wagering, gaming and keno operations.
Proxy votes supported the demerger resolution by 97.76% at a general meeting of the company on Wednesday.
The shares rose 3c to $7.84.
Contractor Cardno Ltd had good news for the market yesterday in a trading update.
The company said it now expects a 51% jump in net earnings for the year to June, much stronger than previously estimated.
The shares rose all day in the wake of the statement being released and ended up more than 4%, or 25c, at $5.91.
The group said in its update it now expects to earn a Net Profit After Tax for the year ending June 2011 of "between $57 million and $59 million, an increase of 51% to 57% on the previous corresponding period of $37.6m".
"The current profit estimate is based on unaudited management results and current forecasts."
The company said the improved 2011 performance "results from generally improving conditions and confirms the success of Cardno’s growth strategy which has positioned the company to take advantage of strategic growth markets such as environmental consulting services".
"Cardno’s strategy of aligning the currencies in which it earns its revenue with the costs has diminished the impact of this foreign exchange movement," it said.
