Management at trans-Tasman dairy processing success story A2 Milk Company are working in overdrive to reassure the market all is well after managing director, Jayne Hrdlicka, suddenly quit the job she took up just over a year ago.
Former managing director, and the architect of much of A2 Milk's explosion in Australian, Asian, North American and European markets, Geoff Babidge, has returned to take over from Ms Hrdlicka, who's departure was announced to the share market today.
She said the pressure of work and travel commitments during A2's next three-plus year growth phase would be too difficult for her to manage alongside her personal health and wellness priorities for her family.
The dual-listed alternative milk company's Australian share price fell almost four per cent, or about 57 cents from a morning high of $14.15 after the surprise news Ms Hrdlicka would step down.
However, the price was still well above recent November lows of $11.30 a share, which had followed a slide from peaks above $17 in late July
Running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company
"The reality is that the next three to five years will continue to require the CEO being present in our core markets of China and the US," she said.
"That combined with running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company."
She said A2 Milk Company was an extraordinary business and she had joined excited about the opportunity to help define its full potential and deliver.
"I am delighted with how much progress has been made, the momentum underway in executing the strategy and the strength of the current leadership team," she said.
"The board and management have worked closely together to chart the future and it is no doubt bright and we are well advanced in executing it."
A2 chairman, David Hearn, thanked Ms Hrdlicka for the "important contribution" she had made to the company.
"The board fully endorses the strategy which Jayne and the senior leadership team have developed," he said.
"The board recruited Jayne primarily for her ability and experience in developing and implementing strategy, recognising that the company needed to develop a refined strategy for the business to meet the new challenges in the next phase of our development.
"It is clear the demands of the business already involve more travel than Jayne had anticipated.
"Considering this and her other commitments, Jayne has agreed now is therefore the appropriate time to transition to new leadership."
He remained confident the strategic course outlined at the company's November annual meeting would "continue delivering strong rewards to all shareholders in the future".
A global search for a new managing director had been initiated, but a replacement was not expected this financial year and therefore Mr Babidge had been approached to return to his old job immediately.
I recognise the positive changes that Jayne has brought to the business and will continue to pursue the strategies and plans developed by management
Mr Hearn said during Mr Babidge's tenure as interim chief executive officer, the company's China based director, Jesse Wu, would assume a direct oversight role of the A2 China business to support its Chinese management team to deliver "an effective and efficient execution of the recently developed China investment plan."
Mr Babidge said he was delighted to be able to contribute to A2's continued success "in any way I can".
"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.
During his tenure as interim chief executive officer, China based director, Jesse Wu, would have a direct oversight role of A2's China business, supporting the China management team to deliver an effective and efficient execution of the recently developed China investment plan.
A2 Milk has forecast a full year earnings before interest, tax, depreciation and amortisation margin in the range of 29 or 30 per cent.
First half revenue for 2019-20 was tipped to be up to $800 million.
Ms Hrdlicka said she would work closely with the board and new CEO as required to ensure a smooth transition.
Her passion and commitment to the company were unchanged.
She joined A2 in July last year having previously been the CEO of Qantas' discount airline, Jetstar, for five years.
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