CSL Ltd's (ASX: CSL) board has admitted the financial performance of the business has been disappointing, but vowed to do better ahead of the company's upcoming annual general meeting.
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Aiming for improvement
In the notice of meeting lodged with the ASX, CSL chair Brian McNamee said the past year had been one of "significant change" for the blood products company, "and the board acknowledges that many shareholders are frustrated with the recent disappointing commercial and financial performance of the company''.
Mr McNamee added:
This includes reporting a multibillion-dollar statutory loss, driven by significant restructuring activity, leadership transition and the recognition of substantial non-cash balance sheet impairments. We built up substantial fixed costs, we were slow to adapt to competitive pressures, our research and development efforts didn't deliver and some investments the Company made did not perform. We recognise this, and the management team is acting with urgency to earn back the confidence of shareholders through results.
Mr McNamee said the company's core markets remained attractive, and the business was resilient and delivering strong cash flows.
He said the strategy was to invest in the core of the plasma business, "with selective investment beyond that''.
He added:
The industry fundamentals remain attractive. Plasma is a structurally stable therapeutic area, with durable demand and significant unmet patient need. CSL also maintains strength in influenza vaccines through the Seqirus business.
Mr McNamee said the board was encouraged by the early positive results of changes implemented by the management team.
He said the company needed to focus on stronger execution and adapt more rapidly as markets evolve.
Mr McNamee said the search for a new Chief Executive Officer was well-advanced, and in the meantime interim CEO Gordon Naylor was positioning the company for the next phase of growth.
CSL shares were 1 cent lower at $174.40 on Thursday. The shares have traded as low as $90 over the past year and as high as $222.47.
CSL shares looking like a good buy
Brokers are currently positive on the outlook for CSL following the company's August results release.
RBC Capital Markets this week upgraded the company to an outperform rating with a $213 price target.
The broker said they now believed that "growth in the Behring business can offset the weak outlook in the Seqirus and Vifor business, and enable the company to deliver mid-single digit EPS growth for the next 3 years".
The company is valued at $83.7 billion. The AGM will be held on Tuesday 27 October.
