Synlait Milk CEO Grant Watson has stepped down after steering the New Zealand-based dairy and infant-formula business through a tumultuous 12 months.
A reason was not provided today (21 October) for Watson’s departure, with chairman George Adams only saying he is taking a break “before deciding his next career move”.
As a search commences to replace Watson, who has helmed New Zealand- and Australia-listed Synlait since January 2022, Tim Carter will step in as interim CEO. Carter heads the Dairyworks subsidiary where Aaron Kenny will assume that role on a temporary basis.
Synlait announced this month it had finalised a NZ$218m ($132.1m today) equity raise to buffer its financial position having taken a NZ$130m bailout loan earlier in the year from its largest shareholder, China’s Bright Dairy.
Watson also recently completed a debt restructuring with creditors and settled a long-running contractual and pricing dispute with its second-largest shareholder, The A2 Milk Co.
Bright Dairy now owns 65.3% of Synlait after taking part in the equity raise, while A2 Milk holds 19.8% after also contributing to the financing.
Watson said in a statement: “Synlait is an amazing and agile company, which I have been honoured to lead. Working with our passionate employees and farmers who care deeply about Synlait’s success has been a privilege.”
The incoming CEO will still be tasked with returning Synlait to profitability and reducing debt.
Revenue for the year to 31 July inched up 2% to NZ$1.64bn but Synlait delivered an EBIT loss of NZ$182.7m versus a NZ$31m profit in the corresponding 12 months.
Net profit after tax was in the red to the tune of NZ$182.1m, compared to a loss of NZ$4.3m a year earlier.
The business also has NZ$551.6m of debt on its balance sheet, 33% more than in its previous fiscal year.
In today’s trading, Synlait’s share price closed the New Zealand session down 8% at NZ$0.40 and was 2.6% lower in Australia to close at 37 Australian cents.
Chairman Adams said today: “Recent months have seen a long list of urgent challenges for Synlait, and Grant ably led the team through them. His achievements are extensive and notably include our balance sheet's recent successful reset.”
