Affco shares sink after CEO shock

Friday 2nd March 2001

ROSS TOWNSHEND: Blocked plans?

By Chris Hutching

Affco's share price slid 14% to 37c yesterday after the sudden unexplained departure of chief executive, Ross Townshend - a move he claims has nothing to do with the company's performance.

Mr Townshend has maintained his reasons for quitting are "personal."

But unhappiness about the company's performance spilled over at the company's annual meeting two weeks ago where a few investors highlighted the asset sales that had swelled the latest profit result. Rural analysts said stepping down from his $850,000-a-year job was Mr Townshend's way of signalling the endemic problems within Affco.

Industry sources suggested Mr Townshend stood in the way of plans by cash-rich South Island meat co-operative PPCS, still looking to invest in North Island operations after unsuccessfully mounting a raid on the Richmond share registry last year.

PPCS wants to expand its premium chilled lamb marketing and the warmer northern winters provide a steadier year-round supply of animals. The search for a North Island partner takes on more urgency with the possibility that New Zealand lamb sales to Europe may soar after the foot and mouth disease outbreak there. Conversely there will also be opportunities for rationalisation.

"If Barnett [Stewart Barnett, chief executive of PPCS] is running things then Townshend would be the first to go," an analyst said.

"Because of its co-operative structure PPCS is the only meat company to have made money and salted it away over the past 15 years while Richmond and Affco have slugged it out against each other and struggled.

"Affco's just been waiting for the right opportunities. As for Townshend leaving? Well, put it this way - you don't sack chief executives when companies are performing outstandingly."

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