Collins Foods, the owner of KFC and Taco Bell stores in Australia and Europe, has announced that its chief executive, Drew O’Malley, intends to step down from the company due to the death of his wife in April.
Mr O’Malley had stepped back from the company in February to care for his ill wife, Jala, and his family.
Mr O’Malley has informed the company that he wishes to depart and will step down officially from the role of CEO effective from July 1.
Collins Foods chairman Robert Kaye said the board extended its deepest condolences to Mr O’Malley and his family and thanked him for his very significant contribution over the past seven years.
“Drew led the business through the unprecedented Covid pandemic and has consistently delivered strong financial results during his time as CEO. His tenure has overseen a period of significant operational expansion in Australia and Europe, driving strong growth in shareholder returns. He leaves the group in a strong financial and operational position, well-placed for future growth.”
Collins Foods has commenced a search for a new CEO.
ASX drops amid interest rate cut delay fears; ANZ shifts rate cut to Feb; Bain Capital lobs bid for Bapcor; Beach Energy warns on profit
The local sharemarket has closed sharply in the red on market concerns that US and Australian interest rates will stay higher for longer.
Welcome to the Trading Day blog for Tuesday, June 11. The Australian sharemarket has lost further ground, with broad falls across the board, led by materials and utilities.
The local sharemarket has closed sharply in the red, amid market jitters that US and Australian interest rates will stay higher for longer.
At the close of trade, the benchmark ASX 200 index was down 1.4 per cent at 7749.1 points. All sectors were in the red, with losses led by materials (-2.6 per cent), real estate (-2.4 per cent), and utilities (-2 per cent).
Financials fell 0.9 per cent, and the big four banks shed between 0.8 per cent and 1.4 per cent. Gold miners were the worst individual performers. Emerald Resources lost 9.2 per cent, as West African Resources slid 8.8 per cent, Genesis Minerals 8.4 per cent and Regis Resources 8 per cent.
But Bapcor jumped 13.3 per cent after fielding a takeover offer from Bain Capital, while Strike Energy rose 11.8 per cent on M&A speculation.
Updates
Collins Foods chief to depart
ASX 200 extends falls
The sharemarket has extended its losses after ANZ shifted its Reserve Bank interest rate cut forecast to February.
The ASX 200 is down 1.4 per cent at 7,748.3 points just after midday on Tuesday. All 11 sectors are lower, led by materials and utilities.
The worst performing stocks on the ASX 200 index are West African Resources and Emerald Resources, down 9.3 and 9.2 per cent, respectively.
National Australia Bank expects inflation to only continue to moderate gradually for the rest of the year, as higher cost and price pressures saw business confidence return to negative territory in May.
Business confidence negative amid price rises
NAB expects inflation will only continue to moderate gradually for the rest of the year as higher cost and price pressures saw business confidence return to negative territory in May.
NAB’s Monthly Business Survey shows confidence fell 4 percentage points to 3 index points, as confidence fell sharply in manufacturing, transports & utilities, and construction, as well as wholesale and recreation & personal services.
Labour cost growth rose to 2.3 per cent in quarterly equivalent terms (from 1.5 per cent in April) and purchase cost growth also rose to 1.9 per cent (from 1.3 per cent).
Product price growth and retail price growth also substantially lifted in the month.
NAB chief economist Alan Oster says cost and price growth measures appear to have accelerated in May for businesses in a sign that is likely to prevent the RBA from moving to cut interest rates for some time.
“We have been wary for some time that the path of inflation from here is likely to be gradual and uneven, and the survey results really reinforce this message,” he says.
“Overall, the message here is a mixed one for the RBA. There are warning signs on the outlook for growth but at the same time reasons to be very wary about the inflation outlook, and we expect the RBA to keep rates on hold for some time yet as they navigate through these contrasting risks.”
ANZ moves RBA rate cut call to February
ANZ is the first of the big four banks to move its forecast for the first Reserve Bank rate cut to February, after forecasting for more than a year the central bank would move in November.
"For well over a year, we have expected that the first cash rate cut in Australia this cycle would be in November 2024. More recently, however, we have been cautioning that the risks around that view were skewed to a later start to the easing cycle," ANZ says.
"Several factors have come together to see those risks become sufficiently material to prompt a formal change in our cash rate view."
ANZ also expects follow-up easing, most likely in April, although May is possible.
"We are retaining three cuts in our forecasts but see the final cut being delayed until the final quarter of 2025.
"We see risks around the start of the easing cycle as balanced. Risks around the quantum of easing are skewed to two cuts (50bp in total) being more likely than four (100bp)."
Bonza staff to be let go
The 323 employees of Bonza have been told their employment will be terminated after administrators Hall Chadwick received no offers for the budget carrier.
Staff were delivered the news that a stand down could not be extended any further, in a creditors meeting on Tuesday morning.
Hall Chadwick partner Kathleen Vouris said talks were continuing with several interested parties, but "employees needed to be given certainty".
"We were also hopeful we would receive an offer, unfortunately we did not, and we cannot continue with any further stand down for employees," Ms Vouris said.
She said a "deed of company arrangement" could still occur, so a liquidation "was not there yet".
A decision to liquidate would give employees access to the federal government's fair entitlements guarantee scheme.
The devastating news for staff came after the last Bonza aircraft flew out of Australia last week, leaving the airline with no planes.
Lessor AIP Capital repossessed the Boeing 737 Max 8s on April 29, forcing Bonza into voluntary administration.
Energy, mining stocks drag ASX 200 lower
The sharemarket has opened sharply lower, hurt by heavyweight energy and mining stocks.
The ASX 200 is down 1.1 per cent in early trading on Tuesday morning, with the energy sector the biggest loser, dropping 2.4 per cent. The materials sector is down 0.9 per cent.
Bellevue Gold, Alumina and Life360 are the top three losers.
However, Bapcor shares have spiked, up 13 per cent, after the auto parts retailed revealed it has received a $1.8bn takeover offer from Bain Capital.
Wine group warns on lower sales, higher debt
Embattled winemaker Australian Vintage has warned that its sales will be lower than expected and its debt higher than expected, with the company in debt negotiations with NAB while it also prepares a $19.9m capital raising to strengthen its financial position.
However, the capital raising will be struck at 20c per share, against the last closing price of 34.5c, and will not be underwritten and so there is no guarantee that it will be fully supported and subscribed by shareholders.
The maker of McGuigan wines has also announced that its long-serving chairman Richard Davis will retire from the board after the capital raising is concluded, as the winemaker restructures its board in the face of sliding sales and a tough trading outlook.
Shares in Australian Vintage had been in a trading halt since late last month.
On Tuesday, the company announced it expected full-year sales to be in the range of $257m to $261m, in line with 2023 but lower than internal expectations. Net debt as at June 30, absent the capital raising, was expected to be $70m to $75m, higher than the $43m to $50m previously expected.
It said it had n-principle terms agreed with existing financier, NAB, for up to $30m of incremental debt capacity out to November 2026. It would also seek an equity raising of up to $19.9m launched to further improve liquidity, reduce leverage and increase balance sheet strength.
The equity raising will consist of $5.5m institutional placement, around $9.5m 2 for 7 accelerated, non-renounceable entitlement offer for institutional investors and $4.9m 2 for 7 non-renounceable entitlement offer to retail shareholders.
After the raising, the chairman will retire. John Davies will be appointed interim chairman. Current director Naseema Sparks will not seek re-election at this year’s AGM.
Southern Cross Gold to merger with Mawson Gold
Southern Cross Gold has agreed to merge with Mawson Gold, which will result in a dual listing.
The combined group will be named Southern Cross Gold and will be listed on both
Australian Securities Exchange and the TSX Venture Exchange.
Tom Eadie, Southern Cross Gold’s leader of the independent board committee and non-executive chairman, says "there has been widespread support both in Australia and overseas for our proposal to simplify SXG’s corporate structure and to obtain a dual listing in Canada".
"The simpler, dual-listed structure will allow us to achieve the following core objectives: access to broader capital markets and institutional/private investors; elimination of a perceived major shareholder overhang; and attract an expected lower cost of equity capital which will allow the Sunday Creek Project to continue its path to development."
Beach Energy warns on profit
Beach Energy has issued a profit warning, flagging a non-cash impairment charge of $365m to $400m before tax in its annual results.
More than half of its impairment charge – around $250m to $275m – relates to its Bass Basin project. The remainder – $115m to $125m relates to the value of Beach's Taranaki Basin assets.
The group will issue its fiscal 2024 results on August 12.
Bapcor gets bid from Bain Capital
Auto parts retailer Bapcor has received an indicative proposal from Bain Capital Private Equity at $5.40 a share after a hefty drop in its share price since May.
The embattled group says it received an unsolicited, indicative, conditional and non-binding proposal from Bain Capital on Friday after market close.
"Bapcor is disclosing receipt of the indicative proposal in advance of the board concluding its assessment of the indicative proposal," Bapcorp says.
The indicative proposal is subject to a number of conditions including satisfactory completion of due diligence, execution of a binding scheme implementation agreement, unanimous recommendation from the Bapcor board.
Bapcor shareholders do not need to take any action in response to the indicative proposal at this stage.
"Bapcor will keep the market informed of any material developments in relation to the indicative proposal in accordance with its continuous disclosure obligations."
The Bapcor board has appointed Macquarie Capital as financial adviser and Allens as legal adviser.
ASX 200 falls on China update; BHP leads mining reversal
Iron ore, copper futures, AUD down after China's underwhelming economic update. RBA's 'step down' in hawkishness evident in September minutes, but deputy governor Andrew Hauser says inflation job's not done yet.
ASX 200 rises on banks; Arcadium top gainer
Rio Tinto's takeover approach lifts Arcadium Lithium appeal. West African Resources drops on Burkina Faso mining concerns. Qantas may avoid second strike after proxy backing.