JOHANNESBURG - Pioneer Foods share price dropped 7.22% on Friday after the group announced that chief executive Phil Roux is stepping down from his role and director of the company.
The share price tumbled to R117.50 on the annoucement, its lowest level in almost three years. It recovered slightly later to close 6.77% down at R118.07 on the JSE on Friday.
Roux will not be completely lost to the group, even though he steps down on October 1. Pioneer Foods will retain his expertise and services as a strategic adviser until the end of November 2019. The company has moved swiftly by announcing his successor Tertius Carstens as the new chief executive.
The group said in paying tribute to Roux that in his tenure as chief executive he had strategically repositioned the company, transformed the operating model, significantly reduced the company’s cost base, developed a pipeline of talent and instilled a performance culture that bodes well for the future.
Chairperson Zitulele "KK" Combi said Roux had been an asset to the company and had brought about significant positive change. “He was responsible for implementing an improved operating model and made some strategic acquisitions, including the joint venture with Futurelife, the Weetabix Kenya acquisition and Food Concepts Nigeria. We have a strong balance sheet with ample capacity for growth and our embedded strategy should ensure margin recovery and growth going forward,” Kombi said.
The group acquired a 49.89% interest in Weetabix East Africa for R190m as at March 2017.
Revenue increase
In the interim results for the six months to end March, the group reported a 2% revenue increase to R10.2bn and 43% decline in operating profit to R700m. The drought, which led to high maize prices, was one of the reasons for a decline in profits. Roux said he would leave behind a strong group with world class assets and brands.
“It has been a real privilege to lead this organisation. We have made significant strides in repositioning it as a more strategically robust group. The underlying fundamentals are very strong and Pioneer is well positioned for future growth. I am proud to be associated with Pioneer Foods and delighted that I will continue to be able to contribute in an advisory capacity over the next two years,” Roux said.
Carstens has a wealth of experience in the group, having joined Pioneer in 1994 and previously been an executive director on the Pioneer board. He has been a member of the senior executive leadership team for more than 15 years and is currently the business executive responsible for the Essential Foods Division, the largest operating division and profit contributor within the group.