AACo stuns investors by revealing CEO's departure

31.07.2013

Australia's biggest beef group surprised investors by revealing the departure of its widely-respected boss in a decision described as mutual, saying it was seeking a manager with a "different skill set".

Australian Agricultural Company, better known as AACo, said that it had begun searching for a new chief executive after agreeing with David Farley, who took the post in December 2009, "that he would cease employment" with the company.

The decision comes amid a difficult period for AACo, which lost Aus$8.4m last year, and in the first three month of this year a further Aus$46.5m, reflecting a huge writedown to the value of its herd.

The group also struggled, for second time, to sell its 1.0m-acre Brighton Downs property, although, after being passed at auction, the site was sold for Aus$11.75m in a private deal, albeit at a price Aus$1.0m less than the group was offered three years ago.

Difficult conditions

However, many see AACo's difficulties as down to external factors - such as drought, and last year's ban on exports of live cattle to Indonesia – and consider that Mr Farley coped well with difficult conditions.

Under his watch, the group has redirected at beef rather than live cattle trade, a plans spurred through the construction of an abattoir in Darwin in northern Australia.

The Northern Territory Cattlemen's Association termed as "significant" Mr Farley's contribution to the industry.

'Surprise and sadness'

Nick Burton-Taylor, former AACo chairman, who remains a shareholder, said he had heard the news of Mr Farley's departure with "surprise and an element of sadness.

"He inherited a very difficult situation," with the company facing the fallout from the world financial crisis and a cattle market which has "seriously been struggling on the live export side."

"What he has achieved has been remarkable," Mr Burton-Taylor told ABC Rural radio, describing Mr Farley as having an "intellect as big as northern Australia".

'Very good job'

Donald McGauchie, the current AACo chairman, said that Mr Farley had "done a very good job", and thanked him for "his considerable contribution to the company.

"David has consistently shown a great ability to see the big picture and AACo's role in the industry and the region," besides being "an important voice in the sector".

"David's skills have been essential to bring the company forward to where it is today."

However, Mr McGauchie added that the group's next chief executive "will require a different skill set to lead the company on its next stage of growth".

Mr Farley is believed to have clashed with the board on some areas of strategy, including over growing cotton at cattle stations.

Before joining AACo, Mr Farley was chief executive at Colly Cotton for 16 years.


agrimoney