Business & Investing: Two chief executives to leave Kiwi companies, Plus retirement village operator Summerset experiences booming demand

Dairy products group Synlait Milk announced yesterday that Leon Clement will step down as chief executive at the end of the month after less than three years in the role.

John Penno, the company’s founder and former chief executive, who also remains a current director, will assume the role of interim CEO until a permanent replacement is appointed following a global recruitment process set to be initiated shortly.

Clement has led the company since September 2018 but it’s likely the dairy group’s most recent result has been his undoing.

Last month, Synlait reported a 76 percent drop in net profit to $6.4 million in the six months to the end of January and said significant uncertainty and volatility would continue to impact the company in the short term.

Chair Graeme Milne described Clement as “an authentic and transformational leader who had successfully repositioned Synlait’s purpose, ambition, and strategy” to make it a more diversified and sustainable company.

Clement said his term as CEO had been marked by “an intensive period of change and growth” and he was proud of what had been achieved during his time.

Synlait Milk shares closed down 2 percent at $3.43. The shares have more than halved in value since August last year.

Resignation 2 – Pacific Edge CEO David Darling to step down in 2022

Long serving Pacific Edge CEO David Darling has given shareholders 12 months’ notice of his intention to retire in April next year, although he has confirmed he will stay on as a consultant.

Chair Chris Gallagher said Darling’s 18 years leading the company since its inception, alongside his expertise, persistence and perseverance in the face of challenges over a long period of time had marked him as “an outstanding chief executive.”

Gallagher said Darling had overseen Pacific Edge’s evolution from a research concept to a fully-fledged commercial entity.

“[He] has been the driving contributor to the development and execution of Pacific Edge’s global strategy and led the achievement of major commercial milestones in a highly competitive global market.”

On Friday, the company’s shares rose to a seven year high after its Cxbladder test had gained approval by United Healthcare, America’s biggest healthcare group.

Pacific Edge shares closed down 4.2 percent at $1.15.

Summerset confirms increasing demand for its retirement village properties

March quarter sales for retirement village operator Summerset Group almost doubled from the same quarter last year, notwithstanding lockdown impacts, though it said the results for the latest quarter came in marginally below its record December figure.

The retirement village operator said it had sold 275 units in the three months ended March compared with 141 in the same quarter last year and 296 in the December quarter.

Of the sales, 148 were new units and 127 were resales of existing units.

Chief executive Scott Scoullar said the company’s wait list was up 24 percent on a year ago and 8 percent on the previous quarter, confirming that demand remained strong.

“This is backed up by our top village new sales for the first quarter, which were in our Rototuna, Hamilton and Casebrook, Christchurch villages.”

Pre-sales for the June quarter were also strong, with all villas being delivered in the three months at Kenepuru, Wellington and Bell Block, New Plymouth sold, while its Te Awa development in Napier had only one unsold villa.

In the pipeline of new builds is Summerset’s fourth village in Prebbleton, Canterbury, which gained resource consent in March. That will include more than 290 independent homes as well as serviced apartments, care rooms and a dementia care suite.

Summerset shares closed up 1 percent at $12.00.

Job ads hit two year high in March

New figures from job website Seek show job advertising rebounded strongly in March, recovering to a near two year high.

The 10.6 percent jump in job ads last month compared with February made it the biggest rise since July last year.

March 2021 ads were 5.8 per cent higher than they were back in March 2019 (in seasonally adjusted terms) given comparisons with March last year are skewed due to the Level 4 lockdown.

Job advertising rebounded despite six days of Level 3 lockdown for Auckland, and Level 2 for the rest of New Zealand, at the start of March.

Advertising for jobs in Auckland surged 13.3 per cent in March, beating the national monthly increase, although regional centres continued to rebound with strong growth recorded in the Bay of Plenty, West Coast and Otago.

Sport and recreation, hospitality and tourism, and retail and consumer products were the industries with the highest growth in job adverts.

Australia’s Network 10 broadcaster plans to interview every staff member in a company-wide culture review

The American owners of Australian television broadcaster Network Ten have commenced a pre-emptive company-wide review into staff conduct following widespread accusations of bullying behaviour and sexual harassment on prominent US talk shows according to the Sydney Morning Herald.

Network Ten, which was bought by US entertainment giant ViacomCBS in 2017, has started detailed investigations into the behaviour of its employees and senior management in an attempt to front foot and address any potential workplace issues.

The review follows a string of high profile accusations of misconduct at major US programs such as The Ellen Degeneres Show and the Today Show which revealed multiple allegations of bullying, toxic workplace culture and sexual harassment last year. In recent years several high profile US media personalities have faced allegations of inappropriate behaviour and bullying including NBC’s former Today Show host Matt Lauer and former Fox News host Bill O’Reilly.

It’s understood the review will focus on sexual discrimination, racism and any issues of harassment or assault.

All employees on television programs and in the corporate divisions of Ten are expected to take part in the review and the network in understood to have hired external consultants to assist with the process.

Quarterly reporting season in the US set to reveal if market hype is justified

As US investors gear up for the start of first quarter earnings next week some are likely to be wondering whether elevated stock levels will justify the results about to be unveiled.

Both the Dow and S&P 500 are currently at record highs as Wall Street optimism about Covid-19 vaccines, federal government stimulus, accommodative monetary policy, a rebounding global economy and a surge in value stocks all have investors continuing to push stocks ever higher.

As seasoned poker players know only too well, from next week investors will be paying to see what hands corporate America are actually holding and the big question on investors’ minds will be: is it enough to justify the hype?

A slew of major bank earnings will kick things off including results from JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo and BlackRock.

According to data from FactSet Research, overall earnings for the S&P 500 are likely to increase 24.5 percent in the quarter from a year ago, while financial sector earnings are expected to surge nearly 80 percent from the first quarter of 2020 as the early stages of the Covid-19 pandemic gripped the world.

Bank stocks have surged higher this year as long-term bond yields have picked up. Higher yields make lending more profitable for banks.

US investors counting down to one of the most anticipated IPOs this year

One of the most anticipated IPOs of the year has investors salivating as Coinbase Global gets set to make its Wall Street debut on Wednesday (US time) through a direct listing of its shares on the Nasdaq exchange

The trading exchange, which is benefiting from the surge in demand for bitcoin, ethereum and range of other cryptocurrencies, now has 56 million active, verified users and manages about US$223 billion in crypto assets. That’s around 11 percent of the total US$2 trillion cryptocurrency market.

Coinbase estimated earlier this month its sales reached US$1.8 billion in the first quarter and that it earned a profit of between US$730 million to US$800 million during the first three months of 2021. That’s up from sales of $190.6 million in the first quarter of 2020 and net income of about $32 million.

The company also said in a regulatory filing in March that, based on private market transactions, the company’s market value was worth nearly US$68 billion — a staggering increase from the US$8 billion Coinbase was valued at it when it last raised money from venture capitalists in 2018.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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