Posts Tagged ‘Owen Poole’

Changes at the top for both meat cooperatives and a return to profit for Ferns

November 12, 2014

The announcement by Silver Fern Farms which signalled a return to profit, albeit a small one, also heralded a changing of the guard. Keith Cooper will retire as Chief Executive at Christmas following Rob Hewett’s move into the chairman’s role earlier in the year.

 

There is a neat synergy about these developments which are mirrored by the changes at Alliance Group where Owen Poole handed over as chairman to Murray Taggart at the last AGM, while Grant Cuff has already announced his retirement as CEO. There will inevitably be speculation about whether either or both have been pushed or have gone in their own good time.

 

The word from the respective chairmen is that both Keith and Grant have gone entirely of their own accord after many years of loyal and competent service in one of the most competitive and bruising industries there is. It wouldn’t surprise me if both, especially Cooper, have decided there must be a less stressful way of spending their working life before they reach the age at which they want to put their feet up.

 

Running SFF during a period of substantial industry change involving seriously reducing sheep numbers, cut throat procurement competition and a perpetually weak balance sheet must have taken its toll. That said, Keith has always been unfailingly prepared to answer phone calls and questions while fronting a lot of the meat industry’s essential public relations issues.

 

Grant Cuff has taken a completely different approach, probably because he is by nature much more reticent than his counterpart; he was also content to take a backseat role and allow his chairman and predecessor as Chief Executive to front the industry restructuring issues. Alliance had had its worst period back in the late 80s after acquiring Waitaki’s South Island assets and under Poole’s management had never allowed itself to fall back into a similarly stressed financial position.

 

While not profitable every year, Alliance has successfully navigated its way through the last 20 years with its balance sheet intact as well as making the right investment and rationalisation decisions at most points along the route. The company remains a genuine cooperative based principally in the South Island. Cuff’s contribution as a manager and more recently as Chief Executive should not be underestimated.

 

SFF has had a much more colourful time over the same period. It entered the 90s as Primary Producers Cooperative Society (PPCS) with no assets outside the South Island, but had a reputation as a hard-nosed, tightly run business that did things its own way without showing any weakness to its competitors. Fortex which collapsed in the early 1990s learned the hardest way of all the rashness of baiting PPCS in its own back yard.

 

By the early 2000s PPCS, under CEO Stewart Barnett and chairman Robbie Burnside, fought a bitter campaign to take over Richmond based in Hawkes Bay. This takeover was eventually successful, although it weakened PPCS which became the country’s biggest, but possibly weakest, meat company. Supplier disaffection saw a steady loss of market share, while the asset base was in need of both rationalisation and reinvestment which has required substantial bank debt.

 

Keith Cooper took over from Barnett in 2006 since when he has led the company through a renaming exercise, the development of a high profile branded consumer meat business (although this is not yet necessarily profitable), sale and closure of a number of assets, establishment of FarmIQ and the conversion from cooperative to ordinary shares. This has been achieved in spite of heavy losses and a weakening balance sheet against a background of rumours about the company’s ability to survive.

 

At the present unlisted share price of just above 40 cents, members ordinary shares valued at $136.5 million in the 2013 annual report, have a market value of a little over $40 million funding assets of $833 million. This week’s announcement talks of debt being reduced by $100 million which will certainly bring down the $35 million interest bill as well as improve the debt to equity ratio, but the real need is for an urgent and significant improvement in equity.

 

According to the chairman Rob Hewett, equity options presented in the PriceWaterhouse Coopers report are still six months away from being able to be evaluated and presented to shareholders. It seems that a further move away from SFF’s previous cooperative status is inevitable.

 

The small $5-7 million unaudited pre and doubtless post tax profit is trumpeted as a $40 million improvement over the previous year’s result, but as a return on the massive asset base it is pretty minimal.

 

Cooper is getting out under better performance circumstances than would have been the case a year ago, but the jury is out on how successful his legacy will be. The new CEO Dean Williamson will need all his experience gained from running Riverlands as part of Brierley Investments meat business 20 years ago, as well as some new skills if he is to return SFF to fully profitable safety.

 

In retrospect and in spite of a much lower key tenure, Grant Cuff leaves the meat industry with a more substantial record of achievement.

Strange rumblings from the deep south

February 6, 2014

The appointment of an independent director should normally be an uncontroversial exercise, but Alliance Group has run into some public relations problems, as it seeks to find a successor to its previous chairman, Owen Poole. (more…)

Moment of truth for MIE and its board candidates

November 26, 2013

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In the seven months since MIE’s first farmer meeting in Gore, there have been more meetings, discussions with meat companies and, most recently, nominations for the boards of Silver Fern Farms and Alliance Group. Meat companies have tried and failed to find an acceptable solution to the problems raised by MIE. (more…)

End of an era for southern cooperatives

October 16, 2013

Alliance Group chairman Owen Poole retired at the end of September after five years on the board and 15 in top management roles, while Eoin Garden, Silver Fern Farms’ chairman since 2007 is retiring at the AGM in December. (more…)

Not sure it’s realistic for farmers to own the meat industry

July 17, 2013

There is a lot of noise about the dysfunctional or broken meat industry accompanied by the suggestion it would be solved if farmers owned a bigger slice of it.

 

The Meat Industry Excellence group has been touring the country since earlier this year, holding farmer meetings and trying to drum up support for fixing the industry’s problems. In total some 3,000 farmers attended meetings from Gore to Gisborne which, even if every attendee was firmly in support, only represents a maximum of 20% of sheep and beef farmers. (more…)

Meat Industry Excellence Group’s campaign warms up

April 29, 2013

The MIE organised farmer meeting in Feilding on Friday was attended by about 700 farmers which one speaker from the floor compared unfavourably with 2000 at the Drought Shout. However there is obviously an increasing level of support for substantial change to the meat industry’s operating method which results in volatile market returns. (more…)

Farmers need to agree what they want

April 3, 2013

The recent meeting in Gore, organised by the Meat Industry Excellence Committee and attended by about 1000 farmers, gave an overwhelming mandate for change to the present condition of the meat industry. (more…)

Meat industry lacks leadership according to Cooke

November 21, 2012

The National Meat Workers Union’s General Secretary Grahame Cooke stated last Monday the large loss published by Alliance Group would be the first of several for the 2012 year. His point is fairly accurate, confirmed by Silver Fern Farms’ loss announced on Tuesday. (more…)

Silver Fern Farms bullish in spite of $31 million loss

November 13, 2012

Hard on the heels of Alliance’s announcement, Silver Fern Farms has also come out with a big loss, reinforcing the belief that all meat companies have had a bad year. SFF’s result was a loss of $31.1 million compared with a profit of $30.8 million before extraordinary items the previous year. (more…)

Alliance posts $50.8 million loss for last season

November 12, 2012

Alliance posted its annual result on Friday which was every bit as bad as predicted, a net after tax loss of $50.8 million for the 12 months ended September. The result included restructuring costs of $13.5 million associated with the closure of the company’s Mataura sheep and lamb processing operations which followed similar costs of $19.4 million the previous year from the closure of its Sockburn plant. (more…)