Murray Goulburn managing director Gary Helou is stepping down after the dairy company missed profit forecasts and said it will borrow as much as $165 million to maintain milk prices paid to suppliers.
Helou will remain with the company for a short period to assist with the transition to an interim CEO, while the company is in search of a successor. He will also cease to be a director of MG Responsible Entity Ltd, the responsible entity of the MG Unit Trust.
Following the MG trading update announced to the ASX today, the Board and Helou have agreed that the stewardship of the company going forward will be best served under fresh leadership. As a result, David Mallinson, currently executive GM – business operations, has been appointed interim CEO of MG and MG Responsible Entity Ltd.
MG chairman Philip Tracy said “Gary has made a significant contribution to MG and has been a powerful driving force behind our transition to become a globally recognised, ASX-listed food business. We thank Gary for his passion, drive and leadership during what has been an important transformation period for MG.”Helou said, “During my time at MG, we have transformed the company’s capabilities and capacity and in the process delivered two consecutive years of premium milk prices for Australian farmers. While maintaining this price has proven to be difficult in current market conditions, I firmly believe MG has the foundations in place to support a strong and successful business in the years ahead.”
Earlier, the company announced that it would borrow between $95 million and $165 million in the current financial year to boost its opening price to $5.47 per kilogram of milk solids.
That is below the $5.60 cited in its first-half trading update in February, and way off the $6 targeted in the prospectus from July’s IPO.
Murray Goulburn also revised down its full-year guidance to $39 million-$42 million, compared to $63 million it set out in its prospectus.
Units in dairy co-operative Murray Goulburn’s listed investment vehicle have plunged in early trading after Australia’s biggest dairy producer slashed its profit forecast and reduced payments to farmers. Units in MG Unit Trust were 76 cents, or 35.51 per cent, lower at $1.38 at 1014 AEST.
