INVESTORS RUN TO THE EXIT WITH CEO
SHARES in Greencross took a beating after the shock resignation of the vet clinic and pet shop operator’s chief executive.
CEO Jeffrey David, who owns $45 million worth of Greencross shares, announced yesterday he’ll be stepping down from the top job “effective immediately” and will be replaced by chief financial officer and Greencross veteran Martin Nicholas.
The surprise departure caused shares in the nation’s biggest owner of vet clinics to plummet 95¢ or 13.5 per cent to $6.08.
But IG strategist Evan Lucas said the announcement hinted at bigger problems nipping at the Brisbane-based company, suggesting there could be a disconnect between the board and its CEO.
“The way it’s been done suggests the relationship was breaking down,” Mr Lucas said.
“He was under pressure with the share price heading in the wrong direction all year.”
He said with Greencross’ merger of Mammoth Pet Holdings and City Farmers businesses recently finalised, it was a good time for Mr David to leave. Greencross shares hit a record high of $10.64 this time last year.
Greencross chairman Stuart James said Mr Nicholas, a former executive with Unilever and Study Group International, was “ideally placed to step into the role” as the “company embarks on its next phase of growth.”
But Mr Lucas said shareholders should brace for more pain. “The question will be now be whether or not you have a situation, (where) it’s a problem with the CEO or the board,” Mr Lucas said. “It’s not a good look and it’s more heartache and pain for shareholders as they wait.”
The change in leadership comes as rival National Veterinary Care, who’s CEO and senior executives are defectors from Greencross, emerged as the secondbiggest player in Australian vet services after its $30 million listing two weeks ago. Nat Vet’s share price rose 8 to close at $1.25 yesterday.