Stockfordchair Chris Riordan has attributed the group’s poor performance through 2001 and 2002 to the key issues of board instability, profit downgrades due to integration issues, a heavy focus on acquisitions and the lack of a clearly defined strategy.
Riordan made the comments at the group’s annual general meeting late last week and also said the group lacked a performance based culture and had developed a central bureaucracy which did not service the acquired businesses well.
This was teamed up with an infrastructure which was larger than the group needed and was the result of focussing on further acquisitions without consolidating and integrating those businesses already within the group.
Riordan says the comments were not designed to point out the failings of anyone associated with the group but to serve as a way to make better decisions going forward.
“The comments are not an attempt to direct blame particular person. The relevance of looking back is simply to assist in making the correct decisions in the future,” Riordan said.
“I am far from convinced that the Stockford model is fundamentally flawed. It obviously needs adjustment and refinement but not fundamental changes. Major problems to date have been caused because the implementation of the Stcokford model has been abysmal.”
Riordan joined Stockford in mid September this year when former chairman Brian Clayton announced he would not continue in the position after Stockford reported an after tax loss of $123.8 million for the full year to 30 June, 2002.
Part of the loss was due to a $104.5 million write down in the value Stockford’s goodwill, which Riordan says was realistic given the performance of the group.
Riordan is Stockford’s third chairman in a year, with Clayton only taking up the role last October following the retirement of the then chairman, Peter Hall.
He will be joined by a totally new board after all the directors involved with the group in 2001-2002 either resigning or not stand for re-election. This includes chief executive and managing director John Malouf, who resigned last week after joining the group in April this year.
Malouf has since been replaced by general manager of business services Adam Cowell, who has taken on the role of acting chief executive.
Motions to issue options to Malouf were withdrawn while similar motions to issue options and shares to Clayton were not carried after being heavily voted against by shareholders at the annual general meeting last week.
Cowell has been joined on the board by Bill Bessemer, chair ofAustchoiceFinancial Services, with Riordan stating two more board members will be announced in the next month.
He has also committed the group to adopting a performance based culture and implementing an accord between the board, senior management and principals aimed at improving the group’s performance.
