Bellamy’s changes and new Fonterra deal announced
Bellamy’s Organic Chief Executive Officer Laura McBain is out the door and a key contract with Fonterra has been renegotiated in hopes of saving the infant nutritional company.
The Tasmanian based business is now back trading on the Australian Securities Exchange (ASX) after a 40-day trading halt. Its shares have however fallen more than a third after the company revealed significantly lower profit projections than it has achieved in the past.
During its 2016 financial year Bellamy’s made earnings before interest and tax (EBIT) of AUD $54.3 million but it is now only expecting between AUD $22 million and AUD $26 million in its 2017 financial year.
COO appointed to acting CEO
Laura McBain will cease her role as CEO of Bellamy’s as of 11 January 2017. She will be temporarily replaced by the company’s Chief Operating Officer, Andrew Cohen. Cohen has been with Bellamy’s since July 2016 and has 15 years experience in retail, fast moving consumer goods and private equity.
“Laura has overseen the growth of the Company over the past decade since she joined Bellamy’s as General Manager in 2016, including the expansion of Bellamy’s markets and its brand,” said Bellamy’s Chairman, Rob Woolley.
“I would like to thank Laura for her contribution to Bellamy’s over the last 10 years,” he further stated.
Further senior leadership changes
In an update to the Australian Securities Exchange (ASX) Bellamy’s announced further senior leadership changes including Nigel Underwood as its new Chief Financial Officer and Dimitri Kiriacoulacos as Chief Corporate Development and Legal Officer during the transitional period for Bellamy’s.
Fonterra contract renegotiated
Bellamy’s also announced it has renegotiated a manufacturing contract with New Zealand dairy company Fonterra to help manage a drop in demand from China for its infant formula.
The supply contract will now be extended by another three years from its original five year periods. Bellamy’s says this will allow it to meet its minimum volume commitments over a longer period.
Two additional grounds for termination of the contract have now been added by Fonterra. The first applies if a person or group acquires 50 per cent or more of Bellamy’s voting shares. The second applies if a person or group acquires 30 per cent or more of Bellamy’s voting shares and in Fonterra’s opinion, that person or group has effective control of Bellamy’s.
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