Meat firms lick their wounds

By IRENE CHAPPLE

A high-profile resignation and multi-million-dollar half-year losses left the meat industry gloomy yesterday.

Richmond announced chief executive John Loughlin had quit, and then reported a $1.5 million half-year loss.

Its smaller competitor Affco reported a $14.7 million half-year loss.

Both blamed the dismal results on a bad season - which shareholders have been warned about since February - and promised solid full-year results.

Affco's shares held up after its report, but Richmond's, with the added news that its much-lauded leader was going, tumbled 33c to $2.12, a drop of 13.5 per cent.

Loughlin said he had resigned to focus on his family wine-making business in Hawkes Bay.

The announcement appeared a surprise, but Loughlin has previously hinted that his tenure would be for five years. He has held the position since 1997.

He said Richmond's half-year troubles and its long-running legal dispute with fellow meat company PPCS had nothing to do with his resignation.

A High Court case to clarify PPCS's status as a shareholder is due to be heard in August.

The 43-year-old, who last year took home a pay packet of $570,000, has been largely credited with introducing the concepts of value-adding and branding to the industry.

Richmond, which is New Zealand's largest meat company, this year introduced the Bite Me range of meatballs and burgers, and Loughlin is adamant the industry must focus on product differentiation to survive.

He credited the change towards what he calls a food-oriented culture - away from a butchery image - to a forward-thinking board, and said Richmond was flying the flag for the whole industry.

Loughlin said that trend would continue under a new chief executive, due to take over in October at the earliest.

The search is likely to be international, but chairman Sam Robinson said an appointment could also be made internally.

Loughlin said Askerne Winery, which he owned with his wife, Kathryn, had evolved from a hobby to a business which had the potential to treble production over the next three years.

He said he might retain his directorship at Richmond, depending on the wishes of the board and the new chief executive.

Yesterday's result comprised a $15.2 million first-quarter loss and a second-quarter profit of $13.2 million.

Robinson said third-quarter results were in line with the second quarter, and a slight drop was expected in the fourth quarter.

If predictions held true, Richmond would post a full-year profit of about $11 million, compared with last year's net profit of $20.7 million.

An interim dividend of 5c a share was declared.