Adelaide Brighton CEO Martin Brydon will retire later this year after four years in the top job

ADELAIDE Brighton chief executive Martin Brydon will step down later this year after four years in the top job at the cement and concrete making business.

Outgoing Adelaide Brighton chief executive Martin Brydon.

• Barro increases its stake in Adelaide Brighton
• Adelaide Brighton has delivered a strong underlying profit
• Adelaide Brighton result to take a hit on “hidden” underpayments

ADELAIDE Brighton chief executive Martin Brydon will step down later this year after four years in the top job at the cement and concrete making business.

The announcement of Mr Brydon’s retirement was made before this morning’s AGM in Adelaide, where new chairman Zlatko Todorcevski said a formal search process would kick off immediately.

Speaking to media after the meeting, Sydney-based Mr Brydon said it was the right time to step down after more than 30 years with the company, and that he would remain in place until a replacement was found.

“It’s time and I’m very comfortable with my decision to move to retirement phase, which will be over a period of time - could be six months depending on how the search goes,” he said.

Adelaide Brighton lifted its revenue by 11.7 per cent last year to a record $1.56 billion, but was hit with a $17.7 million hit resulting from a series of underpayments from customers. Net profit after tax fell 2.3 per cent to $182 million.

The company has commenced legal proceedings against one customer, who they believe was aware they were underpaying for products supplied by the Adelaide Brighton. SAPOL is also investigating the matter.

“Some of it was inadvertent on behalf of the customers because they weren't aware of it,” Mr Todorcevski said after today’s meeting.

“Some of it we think, at least one customer knew they were underpaying.”

Mr Brydon said the customer subject to the legal proceedings represented the “overwhelming bulk” of the lost income.

Fielding questions from shareholders about the matter, Mr Todorcevski acknowledged the failure of the company’s internal controls.

“Both board and management were extremely disappointed when this matter first arose,” he said.

“Both the nature of what occurred and the magnitude of the dollars involved were a surprise and clearly unacceptable.

“We have taken the opportunity to enhance some of our internal processes, where obviously they were not up to the standard that we would normally expect, and we are continuing to work both with the internal and external auditors around processes that we might continue to put in place as we complete our investigation.”

Mr Todorcevski formally succeeded long-standing chairman Leslie Hosking today, with Mr Hosking retiring from the board.

Dr Vanessa Guthrie was elected as a director at today’s meeting while Raymond Barro and Geoff Tarrant were both re-elected for additional terms.

After the meeting, Mr Todorcevski said Adelaide Brighton remained interested in progressing a formal tie up with Mr Barro’s Barro Group, which owns 41 per cent of Adelaide Brighton shares.

“It makes natural sense for those businesses to be brought together at some point,” he said.

“There are substantial synergies, there are substantial overlaps - I think from an economic perspective it makes sense.

“At the right time for the right terms we’d love to do that deal.”

Adelaide Brighton expects sales volumes of cement and clinker to increase this year, with the impact of major infrastructure works in South Australia and the east coast offsetting softening markets in Western Australia and Northern Territory.

However, it expects import costs to increase by $3 million, while energy costs are expected to rise by $6 million.

Mr Todorcevski said internal and external candidates would be considered to replace Mr Brydon.

“Martin has been an integral part of the Adelaide Brighton growth story, building the business into the $4.34 billion company it is today,” he said.

“Given our market position and track record, Adelaide Brighton expects to attract a large and high quality field of candidates.”