Friday, March 29, 2024

A2 Milk boss steps down, shares fall 7.7%

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A2 Milk Co chief executive and managing director Jayne Hrdlicka will step down from her role effective immediately and former head Geoffrey Babidge will take the helm while a search for a replacement is underway.
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The stock dropped 7.7% to $14 when trading on the NZX opened. 

Hrdlicka, who took over as CEO in mid-2018, said she joined the company “excited about the opportunity to help define its full potential and deliver against it.”

However, the reality that the next three to five years need the chief executive being present in the company’s core markets of China and the US, “combined with running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company,” she said.

“The board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me,” Hrdlicka said.

Chairman David Hearn said the board “wishes to thank Jayne for the important contribution she has made to the company.”

For his part, Babidge said he was delighted to contribute to A2 Milk’s continued success in any way he could.

“I recognise the positive changes that Jayne has brought to the business and will continue to pursue the strategies and plans developed by management and agreed by the board,” he said.

Babidge held the role from 2010 to mid-2018 and saw the company’s share price jump from around $1 at the end of 2015 on the back of successive strong sales, with the company’s infant formula attracting strong demand in China. 

The board will commence an international search for a full-time chief executive immediately and hopes to make an appointment before the end of its 2020 financial year in June, it said. 

A2 said that Jesse Wu, the China-based non-executive director, will assume a direct oversight role of the A2 China business to support the China management team in delivering an effective and efficient execution of the recently developed investment plan for that market.

The company also reiterated the guidance it gave in November when it said its annual operating profit margin will be stronger than previously communicated and in the range of 29-30%.

-BusinessDesk

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