The board of rural services company Elders (ASX: ELD) has announced that its chief executive officer, Malcolm Jackman, is to leave the company with immediate effect. The company delivered a spectacular half-a-billion-dollar loss in the last financial year, involving $442.2 million of writedowns and other costs, as it processed the sale of its underperforming forestry and automotive businesses. The normalised or operating loss of $63 million was its worst on record and equally disappointing to long-suffering investors.
With no permanent successor to Jackman identified, the company put a brave face on his departure saying now was an appropriate time for Jackman to step down. The company’s value crashed during Jackman’s five-year tenure, with the results of a restructuring and a turn-around program yet to take effect.
The stated goal of the restructure is to return it to being a pure-play agribusiness, that supplies rural Australia with its business needs. Elders main rival in this space is Ruralco Holdings (ASX: RHL), last week it reported an annual net profit of $8.7 million.
Net debt at year-end was $255.2 million and the business will need to rely on more than just earnings improvement to get itself back on track. The first priority must be to find a permanent chief executive and investors will be keen for this to happen sooner rather than later. Unsurprisingly, speculation on this business is not currently recommended.
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Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.