Aug 2006 Financial News

GraceKennedy considers appointing Wheby and Burton as deputy chairmen

Aug 18, 2006

GraceKennedy is considering the appointment of Don Wehby, chief financial officer and Erwin Burton, chief operating officer of the food trading division and the retail and trading divisions to the post of deputy chairmen, Caribbean Business Report understands.

Sources could not say why GK would opt for two deputy chairmen.

Overshadowing the changes at the top has been the challenging economy and its impact on GK's financial performance. In April, at an investor's briefing, GK chairman & CEO, Douglas Orane warned that profits would be flat. The profit warning, standard in North America but something few listed Jamaican companies attempt, stated that 2006 profits were forecasted to be -5 per cent to 5 per cent of 2005's performance. Recent GK results show that as at the six-month unaudited financial period ending June 30, 2006 net profit after taxes was $908.78 million, a nine per cent decline as compared to June 2005's unaudited financial statements where net profit was $1.002 billion.

Back in April, Orane stated that GraceKennedy's response to challenges is to focus on increasing efficiency and emphasising innovation. Important actions for success, he outlined, were to include maximising human resource capacity, pursuing business opportunities in the Caribbean market and through Caribbean channels worldwide, and facilitating growth through a strong, broad and effective corporate structure.

However, in recent times it has been the departure of Brian Goldson former chief operating officer of the information service division and the impending departure of John Mahfood, head of Hi-Lo Food Stores that have been in the spotlight. Financial analysts suggest that it is the combination of weak financial performance and executive changes that drove the share price to hit its 52 week low of $50.01 on Thursday, August 10th.

That said, during this week's trading, the stock has enjoyed something of a bounce. At the end of Thursday's trading, the share price closed at $56, a 12 per cent increase over last Thursday's closing price.

GK executives were unavailable for comment.

Dennise Williams
The Jamaica Observer
Friday, 18th August, 2006.
http://www.jamaicaobserver.com/magazines/Business/html/20060818T000000-0500_111418_OBS__GRACEKENNEDY_CONSIDERS_APPOINTING_WHEBY_AND_BURTON_AS_DEPUTY_CHAIRMEN.asp