Owens Group getting back on track

By DANIEL RIORDAN Transport Writer

More change is in the wind at Owens Group.

Chief executive David Ritchie, in charge since October, is reviewing all of the company's operations, including its business strategy and portfolio structure.

Eighteen months ago the company completed a successful but costly restructuring and rebranding exercise, but Mr Ritchie says more needs to be done.

He says the eight months last year when the company was without a chief executive (his predecessor Ian Newman left abruptly in January) inevitably left the business rather directionless.

"I've now got the opportunity to pick up on what's been good work on restructuring and rebranding and take it to another level."

Owens' divisions include trucking, shipping, freight forwarding, container and warehousing services, and Hirepool. They were brought under a single operating structure by the earlier restructuring.

The $5.6 million revamp slashed 2000 profits to just $276,000 from $6.1 million, but the new-look company recovered last year to make $4.6 million.

Profit for the six months since March 31 was 82 per cent higher at $2.6 million.

Peformance since then has been solid, says Mr Ritchie, although the slowing of the international economy remains a concern.

"Things have been a bit lumpy. We've had spells in some businesses where it's gone quiet for one or two weeks, then picked up again, so there's continued uncertainty."

He says one of the issues under review is the size of Owens' future presence in Australia.

Thirty-five to 40 per cent of Owens' business is across the Tasman.

It recently opened new coolstorage facilities and this month appointed a former Linfox marketing general manager to the new position of general manager logistics.

"Many New Zealand companies have found it difficult there and there are things we can do to improve our operations there.

"I'm just not sure I'd want Australia to become a bigger part of our operations, whether that would be the most appropriate thing for our investors.

"If nothing else, we need to reconfirm what is the core of Owens, what does Owens as a company stand for, and is going to do longer term."

Mr Ritchie came to Owens after more than 20 years in the oil industry with Shell, most recently in Britain as vice president e-business at Shell International.

Originally from Christchurch, he'd spent the past 12 years out of New Zealand, and had already made the decision to come back with his wife and two children when Owens approached him about the job.

From the start, the board has given him the freedom to make whatever changes he considers necessary.

He says the financials and some of the key performance indicators might be different, but business fundamentals are the same in oil and logistics.

"It's all about understanding people, whether they're staff, customers, suppliers or other stakeholders. What drives their behaviour - I can't underestimate how important that is."

He says he's spent most of the past four months getting to know the business from ground level, meeting staff and customers, and even riding the trucks with some of the company's 1500 plus employees.

"It's been a steep learning curve and it's continuing. There are some things I understand and can make moves on, others I need to understand better."

He takes no credit for Owens' improving share price - up 60 per cent in the past six months - which he attributes to the market's recognition of the company's refocusing.

A stronger board of directors is another reason.

"Overall, the company is more operationally-focussed than in the past, which is tremendous.

"What I'm looking to bring is leadership, raising the sights a little with a long term strategic perspective."