Elders' latest disaster

Malcolm Jackman is a dab hand at painting the worst possible news in the best possible light.

The Elders (ELD) boss has had a wealth of experience at it, having steered the group in recent years through a series of financial crises, corporate disasters and climatic calamity.

This morning's effort, however, was worthy of an award. Seven senior executives of the cattle export trading division, including the general manager, have all left the company as of today, following the discovery of "certain discrepancies and issues in relation to the reporting and recognition of livestock values."

Given the company's financial year ended yesterday, it would appear the problems have only emerged in the past 24 hours. Investigations are on-going and it is not known whether this will have a material impact on the results.

Undeterred, Malcolm's take on this disturbing development was brimming with optimism.

"The change in personnel provides Elders with an opportunity, in line with its recently implemented efficiency strategy, to reshape the broader trading business to better integrate it with the Elders Rural Services Network," he said.

That efficiency strategy involves sacking 10% of the workforce of its sole remaining business, the rural services division, after finally selling its Futuris automotive division in the wake of Ford's announcement that it would cease producing cars in Australia.

That sale, for $69 million back in August, was struck at a discount to a $75 million book value calculated just weeks earlier after a shock $166.5 million write-down of the division.

Elders had both its rural services and automotive divisions on the market for several years but has dithered on both and recently rejected advances from rival Ruralco (RHL) for the rural division.

At last count, it owed $386.5 million with $234 million of that secured to a syndicate comprising National Australia Bank (NAB) ,ANZ (ANZ), Rabobank and the Commonwealth Bank of Australia (CBA). That loan was has just expired.

Nothing seems to shock Elders shareholders these days. The stock was steady this morning at 11c.