The Sacking Season
Whether you were at the board table or the shop floor, the knives were out this week, with CEOs and workers alike discovering they were surplus to requirement.
Goodman Blood Runs Free
Burns Philp has sacked the head of almost every key division at Goodman Fielder as it works through a sweeping review of the company it recently acquired in a $1.9 billion takeover. Only Ron Vela, managing director of Goodman Fielder in New Zealand, and Rob Gordon, head of the consumer division that includes Praise and Uncle Tobys, have survived the cleanout. In all about 500 employees, equivalent to 5 per cent of the workforce, face redundancy with up to 2000 jobs to go over the next few years. The cuts represent the first stage of a drive estimated to cut costs by more than $50 million, although some analysts are optimistic of even greater savings. (Source: SMH)
Retail Boss Dacked
Meanwhile, Ian Duffell has become the fourth Australian retail chief to lose his job this year, after music and underwear retailer Brazin announced a shock profit warning that sent its share price down 30 per cent. The company cut its full-year earnings forecast by 65 per cent, because of "difficult" trading conditions during the March quarter for the Sanity Entertainment group in Australia and UK. The dire assessment was in stark contrast to comments Duffel made in a media report just two weeks ago, reassuring investors that Brazin would meet full-year earnings targets. Brazin is the latest in a series of retailers to be punished for not meeting expectations. Last month, Mel Sutton left Globe International after a profit downgrade. David Jones chief executive Peter Wilkinson was replaced by Mark McInnes in February. In November, Matthew Perrin was forced out of Billabong, after selling the bulk of his shares for $66 million. (Source: The Age)
Debt Collector Gets Chop
And receivables management group Collection House has company sacked its chief executive and warned that profit could fall by a third this financial year. The Brisbane-based debt collector said it fired Russell Templeton after only four months in the job because he had lost the confidence of the board. In a statement to the Australian Stock Exchange, Collection House warned investors that it expected a net profit for the year to June of $12 million to $14 million, compared with a profit of $18.7 million for 2001-02. (Source: SMH)
Qantas Wield Axe Under Terror Cloud
As for the workers, it's a tough time to be in the aviation industry, with the dual terror-SARS threat given as the reason for big cuts in Qantas. Interestingly, chief executive Geoff Dixon says the airline won't downgrade its target for 2002-03 net profit despite having to provide for the $60 million redundancy program. Unions are preparing an industrial campaign against the move, noting it's the workers - and not management or shareholders - who are taking all the pain. Any joy for shareholders should be tempered by the decision of the Australian Competition and Consumer Commission to block Qantas' proposed $520 million alliance with rival Air New Zealand in any form. (Various: Source)
Last Drinks for Kent Brewery
Meanwhile, Carlton and United Breweries have been unable to resist the massive land value of the Kent Brewery in the Sydney CBD, announcing it will close in 2005 with up to 400 jobs to go. That decision is part of a major cost-cutting exercise, with markets looking for savings of as much as $100 million over the next two years. Foster's will transfer capacity from the Kent Brewery to other states, such as Western Australia. Workers are demanding their entitlements are protected and that they are offered redeployment to the interstate breweries. (Source: The Age)
Small Business Ignore ASX Rules
More than two-thirds of Australia's 1500 listed companies are not expected to comply with the Australian Stock Exchange's new corporate governance guidelines, a leading accounting firm has warned. In fact, most smaller companies are unlikely to have the resources to comply at all, opting instead to explain to the ASX why they are not meeting the new requirements. Brian Morse, director of risk management at accounting firm Howarth, said that of the top 500 listed companies, about 60 per cent would meet the new regime in full. But the bottom tier of Australian companies by size - from the 501st company to 1500th - would be serial non-compliers. Morse predicts more than 90 per cent would choose not to meet the ASX's guidelines. (Source: The Australian)
Smith Wins Dickheads Dispute
Businessman and philanthropist Dick Smith has emerged victorious from a three-year legal fight over the right to produce matches under the moniker Dickheads. Swedish company Intermatch Sweden Aktiebolag opposed the granting of a trade mark to Mr Smith's company, Dick Smith Investments. It claimed Dickheads was a "direct copy" of its own famous brand of matches - Redheads, which it bought from Australian company Bryant and May. Bit Australian Trade Marks Office hearing delegate Claudia Murray found none of the Swedish company's objections could be upheld, ordering it to pay Smith's legal bills. (Source: Yahoo)
When Options Are the Wrong Option
Finally, a bit of rough justice from the top end of town ... Funtastic managing director David Hendy was the first to admit this week that his off-the-market sale of 1.4 million shares was "not too clever", given that the toy group's stock put on a further 3.5 per cent later the same day. At $1.10 a share, the deal added $1.54 million to Hendy's wallet, but had he held off until the afternoon, when Funtastic shares recorded a closing price of $1.22, Hendy would have taken home an extra $168,000. (Source: The Age)
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