Big losses precede EG Green shutdown

The company last reported a profit in the year to June 2001, when it achieved a profit of $3.4 million on sales of $132.3 million, according to accounts lodged with the Australian Securities and Investments Commission.

That was followed by losses of $1.2 million and $3 million in the next two financial years.

Despite the losses, the company paid annual dividends to the Green family of $897,000.

The company’s recent performance is unclear, as its accounts have not been lodged on ASIC’s web site.

However, given the industry talk of squeezed margins and bloated costs, it has been widely assumed the company continued trading at a loss, despite recently telling WA Business News that its annual sales had increased to $203 million.

The company has confirmed that no dividends were paid in the past two years. It shocked the Western Australian business community last week when it announced a suspension of operations for two weeks.

It said this week it was forced to suspend operations because of a liquidity shortfall, and was still trying to work out “how this shortfall remained undetected as it compounded over the past few months”.

“At this preliminary stage, we can say we were embarking on several changes simultaneously and this put the company under significant and unnecessary pressure,” it said in a statement

The company said it would go “back to the basics” that have underpinned its past success.

This is certainly the case with the key people at EG Green & Sons.

Exiting the company last week were its managing director Mark Hughes, who was formerly chief financial officer at mineral sands miner Iluka Resources, and its chairman Bill Ryan, who is chief executive of rural consultancy Kondinin Group.

Back in charge is long-serving chief executive Garry Minton, who had been effectively sidelined after Mr Hughes was recruited in 2003.

EG Green & Sons was believed to have experienced a rise in total debt prior to suspending operations.

Its main financier, National Australia Bank, is believed to be owed just under $25 million.

Elders and AWB Landmark and other trade creditors are believed to be owed between $5 million and $10 million.