Silver Fern Farms chief executive Keith Cooper is stepping down from leading the red meat co-operative after eight years in the role.
Cooper, who has been with the company for 24 years, has yet to announce his next career move.
The company has appointed Dean Hamilton, who joined as chief strategy officer last year, as interim chief executive and he will move into the role over the coming months.
Cooper said it was timely to step down after eight years in the role at a time when the company was returning to profit.
He wanted to embark on new initiatives, he said.
“The business has made good progress this financial year following two very challenging years, however there is still much work to do,” he said.
“I have thoroughly enjoyed leading the creation of a co-operative food company, however the timing is right for change, for someone with different skill sets and a high level of energy to take Silver Fern Farms through its next phase of development.”
The company expects audited pre-tax earnings of $5 million to $7m for the year ending September 30.
Chairman Rob Hewett said the co-operative was on track to deliver a much improved profit for the year following a strategic review of the business and a focus on debt reduction.
“We expect the audited pre-tax earnings for the company will be $5m to $7m for the year just ended to 30 September 2014, which will represent a greater than $40m net profit before tax improvement in performance on 2013,” he said.
“We know many of our farmer shareholders see our profitability as a priority for the company this season, which is what we have delivered.”
The company has also paid down $100 million in debt as part of a plan to reduce the cost of debt servicing .
Hewett said the board was pleased Dean had agreed to lead the company through this next phase.
“He brings with him extensive financial and operational senior leadership experience as well as a good understanding of the business,” he said, adding organisational changes this year contributed to Silver Fern Farms’ improved performance.
“Our sales and procurement operations have both been reorganised and performed strongly. Carrying on from that work, we are planning on internally reorganising the business into three species units – beef, sheepmeats and venison.
“The new business structure will continue to be centrally led and will make the co-operative more responsive to future developments and opportunities in the current overall industry model. The improved structure will increase visibility of performance and strategy across species and establish a broader range of opportunities for any future capital structure initiatives.
“We believe the timing is right to look at capital structure options in view of our improved profitability, a positive backdrop of rising global demand for protein, an improved outlook for farm profitability, and ongoing interest from customers to gain security of supply. The company will appoint an investment bank to assist it.”
New capital would allow the company to accelerate the reduction of bank debt and the associated impact of debt servicing, currently costing $35m a year.
Hewett said an improved capital position could potentially enable industry rationalisation if the right opportunities arose.
He said the market outlook was positive which should give farmers good confidence going into the coming season.
“We expect to see the $100-lamb mark achieved given current market signals,” he said.
“Beef should trade in the range of 450 cents a kilogram to 550c and venison is expected to stabilise at recent levels of 680c/kg to 800c.”
A full audited result will be announced in November.
