XANADU Wines is seeking a new chief executive after Andrew Moore resigned from the company following last year’s unexpectedly large $6.2 million net loss.
Mr Moore had been with the company for four years, during which time Xanadu listed on the Australian Stock Exchange and completed several major acquisitions.
However, the company failed to convert its rapid growth into improved earnings.
Its 2003 loss reflected a deterioration in underlying earnings as well as one-off write-downs and restructuring costs totalling $7.3 million.
In investor presentations this time last year, Xanadu had forecast a 42 per cent increase in net profit to $3 million for the 2003 financial year.
In June it advised the market that it expected a net loss of $2 million and last week it revealed the loss had blown out to $6.2 million.
The main contributors were a $4.2 million write-down of inventory – more than double the write-down previously expected – a $1.6 million write-off of goodwill and restructuring costs of $1.5 million.
Chief financial officer Mark Wege said the company anticipated returning to the black in the current financial year, with a forecast net profit of $2.4 million.
This would include a “small” payout to Mr Moore, whose total remuneration in the 2002 financial year was $337,000.
Mr Moore said he had resigned to pursue other interests in the industry and spend more time with his family and insisted it was unrelated to the annual loss.
“The loss was totally because of non-cash items so it’s a pretty long bow to draw,” he said.
Mr Moore said he intended to continue as president of the Wine Industry Association of WA, a position he assumed last month.
Commenting on the 2003 result, Xanadu chairman Ross Norgard said it was “a disappointing result but not a disappointing year as our management team have consolidated the sales, marketing, administration and production operations of the Xanadu, Normans and NXG wine businesses into a single focused wine company”.
Mr Norgard said the company had lifted sales revenue by 46 per cent, deleted a number of non-performing brands and avoided the heavy discounting tactics that had taken place in all key markets.
Xanadu also bought 60 per cent of its managed investment scheme vineyards, which he said would significantly boost cashflow.
As a result of the buyback, Xanadu wrote off goodwill of $1.6 million associated with management rights of the vineyards.
The company’s general manager of trading, Sam Atkins, who has been with Xanadu for just over a year, has been appointed acting chief executive while the board considers a permanent replacement.
Mr Atkins’ previous positions included being managing director of Next Generation Wines (NXG) in South Australia, which was acquired by Xanadu during 2002.
He has also worked as manager UK and Europe for BRL Hardy.
Mr Moore’s departure follows the recent resignation of two other non-executive directors – winemaker Bill Crappsley and UK liquor distributor Bruce Barraclough.
This leaves the company with four directors – Mr Norgard, his partner at accounting firm Norgard Clohessy, Trevor Clohessy, Ken Richards and executive director Conor Lagan.
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