Novus loses its sixth executive as CEO resigns
Novus’s share price fell 2.56% on Monday, after the announcement that CEO Keith Vroon was resigning from the packaging group, before recovering to close unchanged at R3.90.
Executive chairman Neil Birch will be CEO and chairman. The announcement comes days before Novus is due to release its results for financial 2018 and has sparked concern that the figures might be even grimmer than indicated in the trading update released in early May.
Vroon is the sixth member of the executive committee to leave the group in the past 15 months. The company secretary resigned in 2018.
In March, Novus announced the resignation of chief financial officer Edrich Fivaz. At the time it said proceedings to appoint a successor were under way but no appointment has been made.
Birch, a former Bidvest executive, was appointed executive chairman in October 2017.
Sam Sithole, CEO of Value Capital Partners, which recently acquired a 10% stake in Novus, said on Monday they had been concerned about the company after it lost a large part of the valuable Media24 printing contract. “But we remain of the opinion the company has considerable potential.”
Sithole would not comment on speculation relating to a possible tie-up between Novus and Tiso Blackstar (which publishes Business Day) but said: “If the board was presented with a transaction that could add value then it is obliged to consider it.”
Andrew Bonamour, CEO of Tiso Blackstar, said they were not involved in talks but there had been some expressions of interest “some time back”.
Chris Wood, chief investment officer at Prudential, which holds about 10% of Novus, said Vroon’s announcement was unexpected. He said there was some dissatisfaction with the way the company was going.
“It has not lived up to expectations in terms of profit delivery”, said Woods, adding that the most significant disappointments related to investments that had been made to diversify the group away from printing.
Woods said that despite the exodus of top executives there was depth of operational management at the group.
The trading update issued in May indicated that basic earnings per share for the year ended March 31 2018 are set to be about 75% lower.
Much of the knock to earnings relates to impairment expenses after the closure of printing plants in Pietermaritzburg and the decommissioning of other unutilised equipment due to the loss of a substantial part of the Media24 printing contract.
The big hit to earnings from the Media24 contract loss is still to come as the contract expired only at the end of March 2018.