By Jenny Ruth
Tuesday 25th January 2011
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Goodman Fielder chief executive Peter Margin's resignation was a surprise "and will be a loss for the company," says David Walker, an analyst at Aegis Equities Research, which is owned by Morningstar.
"Peter Margin successfully steered Goodman Fielder through the volatility and challenges of the last five years," Walker says.
"For example, the commodity input price boom of 2007 to 2009 and the effects on consumer confidence and buying patterns of the global financial crisis and local economic downturn, all while continuing to invest in R&D and product innovation," he says.
Margin also rationalised obsolete, inefficient plants and opened modern competitive ones.
"He was just the kind of chief executive investors want in a difficult industry," Walker says.
However, Margin might be frustrated at having little to show for his efforts. The stock continues to trade well below the 2005 float price, Walker says. The shares were floated at A$2 and NZ$2.13. Walker currently values Goodman Fielder shares at A$1.41 (NZ$1.84).
"Peter Margin's departure is not a positive for Goodman Fielder and not a good sign either. We take it as confirmation of our longstanding caution on this company which we have never recommended as a priority for investment."
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