Foster’s CEO resigns as profit forecast revised
Foster’s Group Limited has accepted the resignation of their CEO Trevor O’Hoy as they announce a revised forecast of profit for fiscal year 2008.
Foster’s, Australia’s biggest beer and winemaker, cited disappointing returns from wine sales in the US and slower than expected growth in Australia as the main reasons for the revised forecast.
Mr O’Hoy, appointed in 2004, has now decided to leave the company but will stay on in the near-term to assist with a smooth transition. “It’s been a privilege to devote my working life to Foster’s and to lead a team of talented and passionate people through major change and significant challenge over the past four years,” he said. “It’s now time to stand aside and allow the next generation of management to lead the business forward.”
Foster’s Chairman, David Crawford admitted that the acquisition of Southcorp was not completed as effectively as possible with the high Australian dollar also causing concern for the company. “Trading conditions have been tough and the continued strength of the Australian dollar has hit us hard,” he advised. “The reality is we did not execute the Southcorp integration as well as we expected and operating conditions are now more challenging. We must also recognise and acknowledge that we paid too much to acquire wine assets.”
Mr Crawford indicated, however, that he believed there was still great potential for growth in the wine industry. “Our challenge is to drive improved financial returns from wine and to exploit the growth potential of our leading portfolio of global wine brands,” he said. “We have also instituted a broad ranging strategic review of our wine business focusing on where we compete today, how to capitalise on the growth characteristics of the category and the optimal structure and operation of our wine business into the future.”
Mr Crawford added that the Board were very grateful for Mr O’Hoy’s commitment to the company over 33 years and would now embark on a “rigorous international search” to find a suitable successor.