Australian food giant Goodman Fielder has said it has slowed its earnings decline but admitted disposals will be necessary to stabilise the troubled company.
At Goodman Fielder’s AGM in Sydney today (24 November), CEO and MD Chris Delaney said the company, which saw profits fall last year, had “arrested [its] earning decline”.
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A company-wide ‘strategic review’ is currently underway following August’s announcement of a full-year net loss of A$166.7m and debts of $955m. Delaney said the company had made an initial $40m of cost savings, with a further $25m to take place over the current fiscal year and $35m the year after,
Delaney told investors that some of Goodman Fielder’s brands and operations have been labelled ‘non-core’ or put ‘under review’ and could be sold, including the company’s mills, convenience meals arm and meat operations in New Zealand, food service arm Integro, dips, biscuits and frozen pastry, among others.
At the AGM, chairman Max Ould said the FMCG sector was in the most difficult period that he could recall “in over 40 years” because of increased input costs, a high-value Australian dollar and “fierce” competition.
Ould criticised the company’s initial response to market conditions as “inadequate”, but was tentatively optimistic about the company’s current direction.
He said: “The review is now well underway and, although not yet complete, it has identified significant efficiency gains and substantial cost savings, some of which have already been realised.”
“But more fundamentally we need to understand the reasons for our underperformance and fully comprehend our strengths and opportunities. We need to reduce our overhead burden, further deleverage the company, and determine which are businesses and brands that will be the core of our future profitability.”
The company has been rocked by a number of problems this year. Earlier this month bread delivery drivers for the company launched a legal battle over its plans to change their commission, which they say would result in lower pay.
It also suffered as a result of the two New Zealand earthquakes, which damaged a bread plant in the country, and the floods in Australia.
