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After a decade of service to Australia's largest horticultural company Costa Group (ASX: CGC), CEO Harry Debney (pictured) has announced his retirement.
Debney announced his intention to leave Costa Group's at the company's annual general meeting (AGM) today, with the retirement to be finalised within the next nine months.
The outgoing CEO's last two years in the role were underscorred by volatile weather conditions that led to successive profit downgrades and a decline in the company's share price and, more recently, the COVID-19 crisis.
His retirement also marks the departure of yet another member of the Costa Group leadership team that saw the company through its successful IPO in 2015.
Nearly one year ago, after a lifetime dedicated to building Costa Group into the giant it is today, Frank Costa retired from his position of non-executive director.
Frank and his brother Adrian transformed the company into the business it is today after his father sold them the company in 1959.
In more recent years, after stepping back from an executive role in the company, Frank contributed during the private equity phase and his role as a non-executive since 2015 when the company went public.
Similarly, Costa Group CFO Linda Kow resigned from her position at the end of 2019 after working for the horticultural business for close to ten years.
The board is currently in discussions with Debney in relation to a transition plan that will see the outgoing CEO make himself available beyond his retirement in a reduced capacity subject to company requirements.
"The Board acknowledges the outstanding leadership which Harry has provided to the company over the last 10 years and is particularly pleased with the extremely capable and stable leadership team which Harry has put in place," says Costa Group chairman Neil Chatfield.
The board will be establishing a formal assessment and recruitment plan and will consider both internal and external candidates to fill the role of CEO.
Debney's retirement announcement came in conjunction with a discussion of Costa Group's 2019 and the first five months of 2020, the latter of which was underscored by both the impact of the bushfires and COVID-19.
As previously announced by the company Costa hit its earnings targets with an NPAT-SL of $28.4 million for the 2019 calendar year, along with solid revenue growth of $28.4 million.
The statutory result was in the red though with a $33.8 million loss, due to closure of higher-cost mushroom sites and the acquisition of the African Blue blueberry project in Morocco.
The Melbourne-based group also noted its net debt was better than previously forecast at $178.8 million.
As for the first five months of 2020, Costa says it was not immune to the impacts of COVID-19 but in general Debney said demand and consequent pricing for Costa's portfolio of products remains solid, particularly in the retail sector.
Wholesale demand has reduced but is showing signs of levelling, albeit at a lower level of demand.
"The majority of our core produce categories are now experiencing positive demand and pricing from the retail sector," Debney said.
"Farming operations are meeting yield and quality expectations and have not been adversely affected by COVID, although mitigations costs are considerable.
"The company's balance sheet is healthy as we continue to generate good levels of cash flow and the maintenance of excellent liquidity. The company's leverage as measures by net debt to EBITDA-SL remains within our target range."
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