Livestock exporter rocked by resignations
Live exporter Wellard has been forced to release unaudited final results in time for today’s reporting deadline which reveal a cloud over the company’s ability to continue as a going concern.
It has also been rocked by the resignation of non-executive director Sharon Warburton and general counsel and company secretary Yasmin Broughton.
Wellard had breached an undertaking in its working capital capacity at June 30 but obtained a waiver and extension.
The Fremantle-based company has until October 14 to remedy the situation or it becomes a default.
Borrowings of $158.9 million have been re-classified from noncurrent to current liabilities, resulting in a working capital deficiency of $110.3 million.
Wellard is also likely to breach financial covenants to be measured at September 30 and December 31 in working capital and secured loan facilities.
The remaining directors believe it is appropriate to refer to the company as a “going concern” because there is an expectation the breach can be remedied and debt providers will waive anticipated breaches.
There is also an expectation Wellard will receive $15.8 million it is owed by managing director Mauro Balzarini’s private company.
“Should Wellard or the group be unable to achieve the matters set out above, a material uncertainty would exist that may cast significant doubt as to whether Wellard will be able to continue as a going concern,” the preliminary final report states.
Wellard’s net profit after tax came in at $14.8 million, which was in the range expected after three downgrades.
However, it was less than a third of the $46.4 million tipped in the company’s prospectus last year.