New Coca-Cola Amatil chief Alison Watkins has cleaned out the old guard with the impending departure of finance chief Nessa O’Sullivan and SPC boss Peter Kelly.
There is an old saying on the bourse -- “beware a stock when the CFO departs” -- and this is certainly the case with the highly-regarded O’Sullivan leaving. The departure of more than 35 years of corporate inside knowledge follows last year’s departures of Australian boss Warwick White and brewery chief John Murphy.
Watkins, who last year replaced long-time boss Terry Davis, has now effectively removed all the top brass from the old regime.
O’Sullivan has agreed to stay until the presentation of the 2014 accounts on February 17, but her departure leaves a big hole in the management ranks. She had 10 years in the company and was appointed chief financial officer in 2010.
Watkins acknowledged the difficulty in the departure, saying in a statement: “CCA is always conscious of the importance of succession and with the talent available within CCA and externally I am confident that we will announce successors for both roles shortly.”
Headhunters are on the job to find a replacement for O’Sullivan.
Watkins has been at the helm since March last year and had time to arrange an orderly transition for both roles. By announcing the departures on the same day without any replacements, she has simply added to the uncertainty around the company.
Brokerage Bank of America Merrill Lynch is expecting Watkins to unveil a 30 per cent fall in earnings per share for the 2014 year with net profit to be $354 million and earnings per share at 46 cents.
Kelly had been at the company for 25 years and led the fight to save SPC Ardmona, so his departure throws doubt on the long-term survival of that venture.
O’Sullivan was involved in the corporate review which culminated in the major shareholder, Coca-Cola, injecting $600m to take a bigger stake in the Indonesian business.This meant, at the very least, that Watkins had the benefit of her input for this process.
Clearing the decks to put your own team on the job is not unusual, it’s just the way Watkins has gone about it that has raised eyebrows. The test is whether Watkins can make a difference at a time when Coke is under pressure worldwide.
Davis was in charge for some 13 years which, with the benefit of hindsight, was too long and chair David Gonski erred in not forcing change earlier. This extended tenure arguably added to the need to clean out the old guard for the new boss.