A weak result for the 2012-13 year has caught up with the CEO of small Victorian food group Patties Foods (PFL) which owns the iconic Herbert Adams and Nanna Pies brands.
The company revealed yesterday that Greg Bourke had ended five years as managing director of Patties. No reason was given for the resignation.
Patties Foods reported a 75% plunge in earnings in the year to June as the company took an impairment loss on the value of its frozen fruit business.
But underlying earnings were down on the previous year as well as the company battled weak consumer demand and intense price competition.
The company said it has appointed its chief financial officer Michael Knaap and head of sales Tim Peters as joint acting chief executives while it searches for a replacement CEO.
Patties Foods’ shares fell 4c, or 2.9%, to $1.325 at the close yesterday, well under the $1.45 they were at when the weak profit was revealed in late August.
PFL YTD – Patties Foods loses CEO in wake of weak result
In that report, the company revealed that net after tax profit fell to $4.8 million in the year to June after a non-cash impairment charge of $11.8 million against the Frozen Fruit intangible assets.
The underlying net earnings of $17.0 million was in line with the company’s update in late June, which was down 12.7% from the $19.5 million earned in 2011-12.
Revenue rose 3.8% to $244.8 million in the year to June 30.
Despite the first profit fall in four years and the impairment, the company paid a final dividend of 3.9c a share, down from the 4.4c a share in the previous financial year. Total for the year was 7.1c a share (a 58% payout ratio, based on the underlying profit), down from the 8.2c a share paid in 2011-12.
Commenting on the results in the report, Mr Bourke said at the time, “Market conditions remain difficult and for the first time in 4 years, we have reported a decline in earnings.
"However, the core business of savoury brands continues to underpin the performance of the company. Volumes continue to grow strongly although incremental revenue was achieved at lower margins due to increased discounting levels, particularly in the In-Home (supermarket) channel.
"Our manufacturing result was disappointing as we did not meet our own high standards when commissioning the automated pie packing plant, despite other parts of the bakery performing well with good improvements in efficiencies.”
Looking to 2014, the company said it will use cost controls and price rises (to recover cost rises) and further investment to help drive profit.
"Whilst we are in a period of challenging retail trading conditions, we remain committed to driving earnings growth from our underlying earnings in FY13 and building shareholder value," directors said.
That will now be done under a new CEO, when one is hired.
