Perth-based Billionaire Kerry Stokes’ Seven Group has grabbed two board seats at embattled building materials group Boral to go with its now dominant minority shareholding of 20%.
The Stokes interests, through Seven Group Holdings have been pressuring Boral for board seats after sneaking up on the company in a share buying raid that took advantage of weak profits and revenues from underperforming assets in the US and Australian and the added negative impact from COVID-19.
In a statement to the ASX on Monday morning Boral said that four new non-executive directors will join its board today including the two from its largest shareholder Seven. They will replace three current Boral board members who have said they will retire at the forthcoming AGM
“The appointment of four new non-executive directors and retirement of the three existing directors represents a significant level of board renewal and sets us up well for the future,” Boral chairman Kathryn Fagg said.
Ms. Fagg said in the statement she intends to stand again at the AGM.
Boral shares jumped more than 5% on the news of the board changes to close at $4.54 on hopes of improved returns. Seven Group shares edged up 0.05% to $17.91.
Investors clearly believe the company will exit the unproductive US market as a first move.
Over the last two years Boral has issued a series of profit warnings, is facing two shareholder class actions in Australia relating to its North American Windows business and its long-term chief executive, Mike Kane, departed after the weak performance got too much for shareholders and the board.
AdBri executive, Zlatko Todorcevski was named to replace Mr Kane.
Boral took some big impairments on assets in the US and Australia which with weak trading returns, saw the company report a $1.14 billion loss for the year to June. Final dividend was dropped as a result.
As a result of the weak performance and issues raised with Mr Kane’s performance, Boral is reviewing its assets and Ms Fagg said in yesterday’s statement “We are looking forward to completing the portfolio review that is currently underway, and then re-setting the business to deliver stronger performance and value for shareholders.”
Ryan Stokes, Seven Group CEO and Seven Group chief financial officer Richard Richards will join the Boral board along with former CSR CEO Rob Sindel as well as former Aurizon chief financial officer Deborah O’Toole.
Leaving the Boral board after the AGM will be John Marlay and Eileen Doyle.
Treasury Wine Estates chairman Paul Rayner will seek re-election to the board at the meeting to “facilitate a smooth transition of the chairmanship of the audit and risk committee and is expected to retire during this next term of office,” Boral said.
