Elders wields axe in bid to stem losses
Chief executive Malcolm Jackman said the jobs would go from across the company’s operations.
‘‘It became pretty obvious in the first half of this year, with the very tough seasonal conditions that we operated under, that the cost structure in the business was not sustainable,’’ he said.
Elders is aiming to cut operating costs by more than $25 million, from April 2014. A small number of rural and regional branch offices will be closed or consolidated into
larger nearby branches.
Shares in Elders surged 10.5 per cent to 10.5¢ each as it also confirmed it had struck a deal with its bankers on renewing and extending its debt facilities to the end of 2014. The debt agreement allowed Elders to reposition itself as a pure
agribusiness company, Mr Jackman said.
He said the sales process for Elders’ agricultural business was off the table now that refinancing was in place.
Elders in August sold its Futuris automotive interiors business, using the sales proceeds to cut its net debt to $272 million.
The group has almost completed the wind-down of its forestry assets and has agreed in principle with insurer QBE to reduce its equity holding in the joint-venture
Elders Insurance to 10 per cent, from 25 per cent.
Mr Jackman said the final exit from the forestry sector was a ‘‘zero sum’’ game that would not yield any extra cash.
Elders said seasonal conditions in the sheep and wheat belts of southern Australia had improved. Sheep and lamb prices had lifted and sales of fertiliser and agricultural
chemicals had improved.
Beef sales volumes in Asia, especially China, remained strong.
Elders said it expected to report an underlying net loss for the year to September 2013 of $32 million to $39 million.
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Elders announced it will axe about 150 jobs — roughly 10% of its workforce — with roles removed across the company’s operations. The changes include closing or consolidating a small number of rural and regional branch offices into larger nearby branches.
Elders says tough seasonal conditions made its cost structure unsustainable, prompting a reorganisation to reduce debt and operating costs. The company aims to cut more than $25 million in operating costs from April 2014 and has struck a refinancing deal with its bankers to extend debt facilities to the end of 2014.
Elders' shares jumped 10.5% to 10.5 cents each after the company confirmed it had renewed and extended its debt facilities and outlined its cost-cutting and repositioning plans.
No. Elders’ chief executive Malcolm Jackman said the sales process for the agricultural business is off the table now that refinancing is in place. The company is repositioning itself as a pure agribusiness.
In August Elders sold its Futuris automotive interiors business and used the proceeds to reduce net debt to $272 million. The group has almost completed the wind-down of its forestry assets and has agreed in principle with insurer QBE to reduce its equity in the Elders Insurance joint venture from 25% to 10%.
Elders said it expected to report an underlying net loss for the year to September 2013 in the range of $32 million to $39 million.
Seasonal conditions in the sheep and wheat belts of southern Australia have improved, lifting sheep and lamb prices and boosting sales of fertiliser and agricultural chemicals. Beef sales volumes in Asia, especially China, remained strong, supporting parts of Elders’ agribusiness revenue.
Elders plans to cut operating costs by more than $25 million from April 2014, reduce debt, close or consolidate some small rural and regional branches into larger nearby branches, and remove about 150 roles across the business as part of its reorganisation.
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