Treasury slides on CEO exit

Winemaker's board resolves to look for CEO with 'stronger operational focus' after US writedowns, stocks fall more than 5%.

Treasury Wine Estates (TWE) chief executive officer David Dearie will depart the group effective immediately, following a review by the group's board that determined it was in need of a more ambitious leader.

At 1048 AEST Treasury shares were 5.89% lower at $4.47, against a benchmark index decline of 0.9%.

In a statement to the Australian Securities Exchange, Treasury said Mr Dearie will be replaced by non-executive board member Warwick Every-Burns on an interim basis while a search for a new chief executive takes place.

Treasury chairman Paul Rayner said the board had reviewed Mr Dearie's recent performance and resolved it required a chief executive more atuned to the company's future plans.

“Following the writedown of excess US inventory announced on July 15, the board has undertaken a review and concluded that now is the right time to look for a new CEO," Mr Rayner said.

"In particular, having established a solid platform since demerger, the board believes TWE needs a leader with a stronger operational focus to deliver the company’s growth ambitions.”

In July, Treasury announced it would destroy more than $35 million of aged and excess stock in the US and offer major discounts after admitting it overestimated the amount of wine needed to supply the market.

The discounts and excess stock destruction were part of a broader $A160 million writedown.

Mr Rayner noted Mr Dearie's contribution to Treasury since its demerger from Fosters Group Ltd in May 2011.

“Over the last two years David has played a critical role in guiding TWE through its demerger and establishing the company as a standalone business," he said.

"He has also successfully built the profile of TWE’s iconic wine brands internationally."

Treasury said it remains committed to its strategic priorities, even as the search for a new chief executive takes place, including increasing the production and supply of luxury and masstige wine and expanding routes to market globally.

The winemaker reported a net profit for the 12 months to June 30 of $136.8 million, up 1% from $135.5 million in 2012.

Revenue for the year came in below the company's July earnings guidance at $209.2 million, a fall of 0.5% from $210.2 million in the previous year, as a $7 million non-cash, unrealised loss of foreign exchange options weighed.