Substantial changes in market conditions and large losses within the Sanford Limited camp has put a dampener on future expectations for the group, according to chairman Clive Hall.
Hall, while speaking to shareholders at the group’s annual general meeting yesterday, said expectations for the future have been transformed by substantial changes in market conditions and the events of September 11.
“In this environment, we have sustained a loss of $54 million. That includes a once off write-down in goodwill of $43 million leaving an operational loss of $11 million,” Hall told the meeting.
“The operating loss is in excess of our expectations and is the product of a deterioration in market conditions and product delays,” he says.
Hall says, while some business such as investment banking are of strategic importance to the company’s future, some have been wound down pending improvement in market conditions. He says the cost structure of the remaining business units had to be addressed.
“Sanford’s major asset and its major cost is in human resources. Staff numbers have been reduced from a high of nearly 280 staff to around 146 staff at present,” he says.
“Unfortunately this seems to be the nature of this industry and you will be aware of the all too regular recent announcements of drastic staff cuts in the investment banking and broking communities.”
Despite the losses, Sanford has surpassed many in the industry by growing its revenue base by more than 50 per cent in the financial year to 30 June 2001.
The group also plans to pursue the creation of shareholder value by consolidating business foundations and broadening its offering to the general provision of financial services. Sanford will also spend the next few years strengthening its relationship with National Australia Bank and UBS Warburg.
