Elders’ shares sink as CEO retirement, La Niña casts storm clouds

Agribusiness company Elders has been pummelled on the ASX as La Niña and the planned exit of its long-time CEO Mark Allison in a year’s time cast dark clouds over the company’s outlook.

Elders’ shares dived almost 23 per cent to $10.21, despite the business posting strong full-year results, as investors were left unimpressed by the news of Allison’s departure and the company’s commentary.

Allison, who has been at the helm of Elders since 2014 and before that was the company’s chair and executive chair, will retire from the company by mid-November next year.

“The timing is right,” said Allison, who is also the chair for peak industry body Agribusiness Australia. “[It] will allow for a smooth transition and a leadership refresh for Elders’ next phase of growth.”

The announcement blindsided investors, with Elders’ share price losing a fifth of its value, even as it unveiled a 9 per cent increase in statutory profit after tax to $162.9 million for the 2022 financial year.

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Shaw and Partners senior investment advisor Adam Dawes said he was “really disappointed” with Elders despite being “really comfortable” with the company’s annual profit growth.

“I think the market took it fairly negatively about the CEO Mark Ellison retiring within a year,” Dawes told this masthead, adding that the 12-month time frame to find a replacement was welcome news. “He definitely brought this business from lower levels and made it what it is today, so I think the market is a bit concerned he is leaving.”

The company will pay a final dividend of 28 cents per share, taking total dividends for the year to 56 cents partially franked (30 per cent), which Dawes described as the “best I’ve ever seen for Elders”. “But it’s disappointing that the market’s hit it so hard.”