The largest investor in Yowie Group is looking to overhaul the Australian confectioner’s board in a bid to improve the company’s performance.
Investment group Keybridge Capital, which owns around 23% of Yowie, has called for a shareholder meeting on Wednesday (24 June) to replace the “majority” of the firm’s board.
Keybridge also wants its managing director Nicholas Bolton and John Bolton, a non-executive director at the investment firm, to be its representative directors on the Yowie board. The investor claims Yowie has “resisted Keybridge having representation proportional to its shareholding”.
Yowie have also called a meeting for Wednesday, Keybridge noted. It said the confectioner is “seeking to return AUD0.04 per share to shareholders as a capital return”.
The investment group said it will vote in favour that move but added: “Keybridge has, however, like other Yowie investors, suffered a significant loss on its Yowie investment and is disappointed that the current board has been unable to facilitate the changes necessary within the business, to make Yowie the successful company we believe it ought to be.”
On 24 April, Yowie reported a 36% drop in third-quarter sales to US$2.4m, pointing to “significant competitive activity” and Covid-19 prompting lockdowns in the US and Australia in March hitting sales of impulse and novelty confectionery. The decline in sales led to an EBITDA loss of $682,000, which Yowie said was “not as severe” as the company’s second-quarter EBITDA loss of $955,000.
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On 6 May, Yowie provided a trading update, reporting its sales in April slid 52% versus those generated in March.
Keybridge today described the third-quarter results as “very disappointing … which compounds the disappointing results over a number of years”.
If the investor gets “board representation as Yowie’s largest shareholder”, it said it will immediately review the confectioner’s operations, look to improve “cost controls and operational efficiencies”, “look for opportunities for sales growth” and “consider value-accretive corporate transactions that may enhance the value of the Yowie business”.