Gloomy day for Pod

The sudden departure of Pod boss Mark Bilton last month combined with a profit warning cast a gloomy shadow over the company's annual meeting yesterday.

Adding to Pod's woes, the listed textile company's shares dived sharply on news of the warning, plunging 30c to 75c by the end of the day.

Executive chairman George Gould told the 30 shareholders at the meeting in Christchurch that "difficult" trading conditions meant the current year's net profit before goodwill and amortisation could fall to around $1.5m, more than 60 per cent down on last year's $4m.

However, taking into account $700,000 from last year's closing of Logan Textiles, the drop in profit in the year ending June 30, 2006, was more likely to be around 55 per cent.

"The forecasts are disappointing, but the board is focusing on restoring company profitability to the levels achieved in recent years," Mr Gould said.

Mr Bilton's surprise resignation as managing director and chief executive was never far from the surface at the meeting, with Mr Gould having to field several questions from shareholders on what happened.

One local sharebroker said the atmosphere of the meeting was clearly "upset".

Mr Bilton left Pod on October 7 after just two years in the job, saying it was his decision to leave. He had completed what he had set out to do by turning Designer Textiles into Pod, he said.

Mr Gould, who is acting chief executive until a new appointment is made in the new year, said at the time Mr Bilton's departure was amicable and was decided between Mr Bilton and the Pod board.

At last year's annual meeting, shareholders agreed that Mr Bilton be granted up to 700,000 share options and that the company give him an interest-free $100,000 loan to buy Pod shares on the New Zealand Exchange.

An Auckland shareholder, who declined to be named, asked Mr Gould what had happened since then.

"We allowed Mark Bilton to buy more shares, gave him a loan, he was really keen on Pod, but obviously spat the dummy somewhere along the line."

Mr Gould answered, saying it was "a delicate matter".

"Mark resigned to pursue other activities. The company has moved on, taking other directions."

"Well it wasn't a good look, I don't think," the shareholder replied.

Mr Gould: "The board wanted organic growth, whereas he was more interested in acquisitions. (It was) more about where the day-to- day initiative was going. We want to get closer to our customers."

A Christchurch broker, who also did not want to be named, told the meeting Bilton had been making "great traction" for Pod.

"Suddenly now he leaves, there's a profit warning, a momentum shift."

Mr Gould said, "I think we have to move on from Mr Bilton. We have talked about his desires for acquisitions. I think that's what he saw as growth.

"We are just as able to target acquisitions. We are well-equipped to deal with those."

Mr Gould told the meeting Pod was aiming to be more price competitive and was rolling up its sleeves to "get on with it", from the chairman down through the directors to the management team.

After the meeting, Mr Gould said it was obvious Mr Bilton had had a lot of support.

"Mark's departure simply highlights the fact the board wanted to get closer to its customers, achieve organic growth. Mark just wanted to buy things."

- nzpa