As expected, shares in McAleese (MCS) fell heavily yesterday after the company sliced its estimates for revenue and profits and revealed plans to downsize in the wake of the Cootes tankers debacle.
More importantly, more than 500 jobs will go at the company because of incompetent management and supervision at Cootes.
The shares lost 34.5%, falling to 72c from $1.10 where they closed last week when the company requested a trading halt to rework its forecasts after the company lost fuel cartage contracts with BP and Shell, and saw its tankers grounded again in NSW, and then in Victoria on Monday.
That means the company’s lost more than $230 million in value since floating on the ASX late last year at $1.47 and reached a brief high of $1.605.
McAleese has warned that it will take a $47 million hit to its full-year earnings from the costs of the contract losses and the impact of the Cootes’ problems.
With authorities in NSW and Victoria grounding the Cootes’ fleet, McAleese said that the head of its bulk and liquid transport division, Chris Keast, has handed in his resignation.
McAleese chairman Mark Rowsthorn, who owns almost a third of the company, will also assume the role of interim executive chairman.
The company said the reshuffle would allow chief executive Paul Garaty to focus on sorting out the problems at Cootes and operational management.
McAleese, which will announce its audited first-half results on February 24, says its earnings before interest tax, depreciation and ammortisation for the full year will be $107.5 million, lower than the $126.8 million the company forecast in its prospectus.
The company will report a $38 million bottom-line loss in the first half on revenue of $389.6 million.
As well as the problems in the Cootes business, the company has blamed the poor result on poor weather at its Kalgoorlie and Port Headland businesses in January and lower-than-expected earnings from its specialised transport and lifting division.
The company says the total costs related to the Mona Vale accident last October in Sydney which involved a Cootes truck in a firey fatal crash, will be $19.1 million.
As a result of the decisions announced yesterday, McAleese will axe about 540 jobs including truck drivers and workshop staff from Cootes.
The transport company will also sell about half of the trucks and trailers in Cootes’ fleet after losing contracts with Shell and BP, and withdrawing from supplying 7-Eleven in several states.
McAleese said the jobs would be gradually lost over the next six months as the contracts ended. The company has set aside about $13 million for redundancies at Cootes this financial year.
Separately, the NSW Department of Roads and Maritime Services said more than 300 charges had been laid against Cootes.
More than 220 court attendance notices have been issued relating to interstate registration, while 86 are for operating unsafe vehicles.
Five charges relate to mass (the load of the trucks involved) and two to load restraint offences for fuel leaks, the department said in a statement.
