Richmond chief in sudden resignation

By PHILIPPA STEVENSON agricultural editor

Richmond's chairman for less than a year, Bob Croker, has resigned from the board as the meat company leads up to Stock Exchange listing in the New Year.

Mr Croker, originally alternate for millionaire recluse Peter Spencer, whose Toocooya Nominees owns 10 per cent of Richmond, was appointed to the board in his own right before becoming chairman in January.

A series of rapid changes in big shareholders has created a revolving door for directors in the past two years, but shareholders spoken to by the Business Herald were surprised but not upset at Mr Croker's departure, two weeks before the company's annual meeting.

Mr Croker had done a good job during a difficult time for Richmond, which included fighting off a takeover bid by South Island processor PPCS, said one, who declined to be named.

But his links with Mr Spencer, who is also a large shareholder in Richmond rival Affco, raised questions about his independence. He was regarded as having little to offer Richmond, the country's biggest meat processor, which is poised to capitalise on a period of merger-driven growth.

Last month, Richmond announced its best result in 70 years, reporting an after-tax profit of $11.7 million, compared with a $900,000 loss in 1999.

Mr Croker, formerly a senior partner and chairman of Ernst & Young, said in March that he knew he was putting his neck on the line in accepting the chairmanship.

Deputy chairman Michael Morris will be acting chairman until an appointment is made.

The board planned to reduce director numbers and acquire a different mix of skills and experience "to take the business to the next stage as a food company." It had been heavy on financial experience, he said.

Two other directors, Ian Grieve and Robert Nelson, are not seeking re-election.

James Aitken, chairman of the farmer shareholder trust Richhold, said shareholders now wanted to see stability.

His only preference for Mr Croker's replacement was "someone who adds value to the listing process; someone the market sees as a good chairman."

When it listed, Richmond would be one of the top 40 public companies in New Zealand and would be exposed to far more analysis than in the past, he said.

The chairman would have an impact on how the company was perceived.

Director and former chairman Sam Robinson, dumped during the PPCS term on the board, declined to comment on whether he would make himself available for the chairmanship.

Another suggested for the job is Active Equities' Bruce Hancox, who, with Paul Collins, represents Hawkes Bay Meat, which bought out the 35 per cent PPCS stake in August to become Richmond's cornerstone shareholder.

The pair had been doing a good job on the board, said one shareholder.

Traditionally, the board elects its new chairman in January.

Meanwhile, coinciding with NZSE listing in the first half of next year, the board has proposed a public offering of a new class of listed securities, an issue of capital notes of up to $50 million.

The initial issue would be $30 million, with the right to accept over-subscription for another $20 million.

Chief executive John Loughlin said the notes would significantly strengthen the company's balance sheet.

"The flipside of the farmer suppliers receiving excellent returns for livestock is the need for increased capital to fund a larger working capital requirement," he said.

"The issue is sized for this and other initiatives the company may wish to pursue."