Pink shirts keen to get in black

23 Dec, 2013 01:00 AM
Elders group general manager David Goodfellow has put his hand up to take on the managing director's role.
Elders is an iconic brand, everyone appears to have an interest in Elders...
Elders group general manager David Goodfellow has put his hand up to take on the managing director's role.

DEPARTED Elders managing director Malcolm Jackman reportedly wants to be remembered as the man who saved the ailing 175-year-old company from the corporate scrapheap.

But it may well be his heir apparent, group general manager David Goodfellow, who will deliver life-saving breath to the once prosperous pastoral house.

The five years under Malcolm Jackman saw Elders accumulate annual losses of close to $1.4 billion, a reflection not of Jackman's performance but more a representation of the onerous challenge he has wrestled with since the Global Financial Crisis struck in 2007.

And any pain or torment Mr Jackman may have endured during his tenure at Elders was certainly felt at a greater level by shareholders.

Elders shares peaked at $2.83 a share in June 2007, on an adjusted basis equating to $28.30, due to a 10 shares for one consolidation, which was implemented in December 2009.

Elders shares last traded at 10.5 cents (as at Monday), catastrophic enough if you happen to be a shareholder, but an improvement on the all-time low of 5.7 cents recorded in June 2013.

Like farmers, Elders shareholders and staff remain eternally optimistic that the somewhat battered but once great powerhouse of Australian agriculture is off the 'canvas' and pugnaciously returning to the path of prosperity, and Mr Goodfellow could be the driving force.

He has recently been in WA holding meetings with senior management and staff across the State and the message he is delivering is certainly upbeat and positive.

It appears he has been well received by the pink-shirted troops and the hope is that the generations of loyal clients that hold Elders so dearly will embrace the new regime and put the pain of the last few years behind them.

"Elders is an iconic brand, everyone appears to have an interest in Elders and when anything happens in Elders it's all over the media. People love learning about what is going on in the company," Mr Goodfellow said.

"It's good for the overall industry for Elders to be strong."

Elders chairman Mark Allison has yet to announce a successor to Mr Jackman but Mr Goodfellow is keen to take on the role.

"Mark has made it quite clear there will be a proper process around major decisions and one of the most important decisions for any chairman is to appoint the right CEO," Mr Goodfellow said.

"I would certainly love to have the job if I were given the opportunity."

And in terms of Elders staff and customers he appears to have the right credentials.

Although only part of the Elders team for the last two years, his rural pedigree is solid.

He left school in 1984 and began as a jackaroo at Warren in western New South Wales, followed by a stint at Walcha, northern NSW, then went on to Hawksberry Agricultural College and managing a farm at Molong, NSW.

Teaching stints at Orange Agricultural College, NSW and Marcus Oldham College, Victoria, were followed by his first involvement with Elders, when in 1998 he was recruited to manage Elders Rural Bank for south east Australia (Victoria/Riverina NSW).

A seven year period as CEO for the Baillieu family managing their farm assets, equities and commercial properties provided diverse exposure and recently he filled the role as chief executive for Macquarie Bank's Paraway Pastoral Company before rejoining Elders in 2012 in his current role.

Taking over the role of Elders CEO may well be one of the toughest gigs going, but Mr Goodfellow believes the bad news is behind the company and although there are plenty of challenges ahead, the road to profitability is around the corner.

"Nothing is left in the cupboard to surprise anyone with, I think any surprise will be on the upside that Elders has returned to being profitable again," Mr Goodfellow said.

"It (profitability) has come at a combination of completing the sell-down process, or being near to completion, and having taken a substantial amount of surplus costs from the business.

"As the industry consolidates we will continue to need to look at our business to identify where we are efficient and where we have work to do. That's just good business management.

"Will there be another wholesale restructuring? We don't think so. We think we have done enough over the last two years to set the business up for sustainable profits moving forward.

"With the restructuring we have done to ensure Elders is profitable even in adverse seasonal conditions and the support banks have provided through to December 2014, ensures clients have certainty of payment dealing with Elders.

"The focus has been acutely on becoming a pure play rural business.

"Essentially that is now complete and with the latest sale of our automotive business and the commitment to have forestry wound-up imminently, the unit holders of all the managed investment schemes have voted to have those schemes wound-up, that completes the restructuring of Elders.

"Commensurate with that is the commitment from the banks for ongoing support.

"It's time for Elders to start its next phase as a pure play agribusiness and consistent with that timing is the appointment of a new CFO in the business Richard Davey and a new CEO of the business to be announced sometime early next year, before the end of March.

"The restructuring is now behind us, it's now about moving the business forward, to do that with the confidence we have needed to do a couple of things.

"We need to make sure there are no more skeletons in the cupboard, hence the cleanout at September 30, and we have a business set-up to be profitable even in the tough years.

"My ambition is to ensure Elders continues to have the best staff available to provide information, technology and services to our farming clients and return Elders to a situation where it continues to generate adequate profits to reinvest back into the industry.

"Elders in decades gone by has always taken some of its wealth and invested in the industry.

"In the 1970s we were involved in the development of the feedlot industry in Australia and the development of the live export trade and even wool processing, such as our investment in BWK in Germany.

"We haven't always got things right, but Elders has always had this culture of trying to create markets for its clients.

"Over the last five years we have been focused inwards trying to tidy ourselves up and we haven't had that outward looking focus at all.

"In my mind the industry is starting to see some of the impact of that."

A repeat of the $505m statutory annual loss that was unveiled in November is unthinkable and highly unlikely, but the new CEO, whoever that may be, will need to continually deliver a positive message to shareholders, staff and clients, for the company to go forward.



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