Despite the company’s weak sales and earnings performance over the past 18 months, Coca-Cola Amatil (CCL) chairman David Gonski is seeking re-election to the board of the soft drink bottler at the annual meeting in May.
That’s despite recent speculation he would step down this year following the appointment of a new chief executive in Alison Watkins a year ago.
It is understood that if re-elected at the AGM, Mr Gonski will tell the meeting that this term will be his last and he may step down before the end of the three year term.
Mr Gonski has been chairman of Coca-Cola Amatil since 2001 – the same year former chief executive Terry Davis took the helm.
He was tipped by analysts to retire once new CEO Alison Watkins settled into the role. He has been a director of the company since late 1997. He retired from the board of Singapore telecom in March of this year.
Ms Watkins has spent most of the past year righting the CCA ship after it drifted off course in the final year of Mr Davis’ long reign.
That has included write downs, job cuts, spending cuts and selling nearly 30% of the company’s Indonesian operations to The Coca Cola Company of the US as a way of relieving pressure on CCA’s finances and bringing in a partner with sufficient resources to help drive growth in that huge market.
Her efforts have been rewarded with the rerating of the company as seen in the gradual rise in CCA shares to a year high yesterday in trading of $10.99 – still along way from the all time high of close to $15 in early 2013.
But the shares are up 17% from the start of this year – while the overall market is up around 10%.
The shares closed down 1% at $10.86 yesterday.
Gonski to stand again at Coca Cola Amatil, despite a weak couple of years
The market believes the nadir in revenue and earnings terms was reached last year when Coca-Cola Amatil Limited reported net profit after tax of $375.5 million, before significant items, down 25.3% on the 2013 full year result.
Dividends fell 28% as a result, but the company is confident this year will see an improvement with earnings steadying, and growing in 2016.
Mr Gonski, who is also chairman of the Australia and New Zealand Banking Group, is asking CCA shareholders to elect him for another term at the annual meeting on May 12.
That might be a bit of an ask for some CCA shareholders. After all Mr Gonski and Mr Davis presided over eight years of double-digit profit growth at CCA between 2001 and 2010 and lifted return on capital from 7% to 22%, before it turned pear-shaped, with underlying net profits falling 32% since peaking at $558 million in 2012.
According to the CCA annual report, the company paid more than $5 million in termination payments in 2014 to Mr Davis, former Australasia managing director Warwick White, former Australian Beverage managing director John Murphy, former chief financial officer Nessa O’Sullivan and outgoing SPC managing director Peter Kelly.
