New Affco director

By Hugh Stringleman

Friday 6th December 2002

Affco Holdings has appointed agribusiness investor Peter Spencer as a director in what may be a harbinger of more restructuring for the listed North Island meat company.

Chairman Sam Lewis said the Spencer appointment was an additional director for now, but would not explain what further moves were afoot.

"It will become clear when the notice of meeting (for the agm) goes out shortly," he said.

The annual meeting will be held in late January. Affco declared a $12.35 million loss for the full year to September 30.

Turnover was down 17.5% to $991 million, an indication that Affco had to fight for slaughter stock supplies from farmers and lost market share.

Mr Spencer's Toocooya Nominees owns 21% of Affco shares, while the family-owned Talleys Fisheries is the largest shareholder with 26%.

Both investors elected to stay with Affco during the latest of a series of rights issues and capital raisings, thus increasing their stakes when other investors pulled out.

Toocooya is already represented on the board by Arthur Young and Kevin Lowe.

Mr Spencer is one of the wealthiest men in New Zealand, with extensive farming and agribusiness interests, although he is known to spend most of his time in London.

Affco has been in financial trouble for most of the past decade, and speculation of a restructuring agreed by Talley's, Toocooya and a third large shareholder, Green & McCahill Investments, has been circulating among farmer-shareholders for some time.

Mr Lewis said the company's disappointing first- half result had strengthened resolve to permanently sreduce cost structures and simplify business processes across all areas of its operations.

The full-year result includes $2.8 million of non-recurring restructuring costs. Affco is now seeing the benefits of the restructuring programme, including a turnaround in operating earnings in the second half of the year, Mr Lewis said.

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