Southcorp has ‘stabilised’ with a 600% jump in profits - and none of it's for sale, its chief executive said.
In the six months to December, Southcorp recorded a 610% increase in net profit to AUS$40.5 million, following a 97% drop in the previous first half, when it posted AUS$5.7m.
CEO John Ballard, who took over from embattled chief Keith Lambert a year ago, was complimented for controlling the company’s slide and improving performance.
Ballard said Southcorp had saved AUS$23.1m in costs and business improvements in the first half.
At the same time he ruled out any ‘big ticket’ asset sales, saying that expectations for the 2004 harvest were for above average yields, with a resultant increase in the need for working capital.
‘I’m pleased to say that while Southcorp still has a way to go, we have stabilised the business and substantially improved profitability this first half year,’ he said.
‘It’s a good outcome especially bearing in mind the continuing oversupply of wine in some markets and the appreciation of the Australian dollar.’
Southcorp, which owns Penfolds, Rosemount and Lindemans, has been at the centre of lurid media speculation over its sliding profits, numerous trading suspensions, and boardroom battles.
Since February last year, when Lambert was forced out, the troubled multinational has seen several high-rankers leave the company, including chief winemaker Philip Shaw, Peter Cleaves, chief financial officer, and general manager Robert Porter.
One analyst, David Cooke of ABN Amro, told the Sydney Morning Herald, ‘Not everything there is hunky-dory, but these guys are doing as good a job as you’d expect and hope.’
Written by Adam Lechmere, and agencies