Monday’s announcement of a new CEO for struggling building products group, Boral was only worth around $10 million or 8 cents a share to the share price at the close on of ASX trading.
Still, the price rise would have been welcome for suffering shareholders who have had to endure several years of underperformance profit downgrades and then retirement of the man who presided over the problems, CEO, Mike Kane, who is returning to the US shortly.
Boral’s 2.3% price rise to $3.56 was a rare positive on a day when the market fell 128 points or more than 2% instead of being up around 24 points at the opening as the overnight futures market had the index on Saturday morning.
Boral’s new CEO is a 52 year highly experienced executive, Zlatko Todorcevski who will succeed Kane from July 1.
Mr. Todorcevski is currently on the board of rival building materials company Adelaide Brighton and has held senior roles at BHP, Oil Search, and Brambles.
“It’s a great honour to be appointed as Boral’s next CEO & managing director,” Mr. Todorcevski said in a statement yesterday.
“I see my job as helping to shape Boral’s future and ensuring that a company with such a proud 75-year history and heritage continues to thrive and prosper for many years into the future,” he said.
Mr. Todorcevski is a former chief financial officer of logistics giant Brambles and of energy company Oil Search. He also worked for 23-year career with BHP, rising through the ranks to become CFO of the sprawling group’s energy business, based in the US.
Boral chair, Kathryn Fagg, said Mr. Todorcevski was an outstanding candidate.
“With exceptional commercial acumen, strategic insight, and a focus on return on capital, Zlatko has a strong track record as a senior executive in a number of large industrial and energy companies, with international operations,” she said in yesterday’s announcement.
“Zlatko’s mandate as Boral’s CEO is at the outset to set a clear operational plan, including how to manage through the current challenging conditions, and to work with the Board to finalise the review of the operational performance and strategic positioning of the businesses within Boral’s portfolio. He will then deliver a strategy to strengthen the financial performance of the company and to improve returns for our shareholders,” she said.
Boral is facing pressure from two class actions and the emergence of Seven Group Holdings as a 105 shareholder in the company. Seven Group can’t afford the $5 billion or so to launch a full takeover, so shareholders will miss out in that respect.
But it will agitate for higher returns and will probably lift its stake to the 19.9% level and then beyond, buying just under 3% every six months, as it did with Seven Network and West Australian Newspapers (before forcing them to merge) and in Beach Energy.
