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Changes: Woolies Gets 3 New Directors/Transurban Loses CEO

Changes: Woolies Gets 3 New Directors/Transurban Loses CEO
January 31 2012 - Australasian Investment Review – (AIR)

On the eve of releasing what are expected to be average second quarter and first half sales figures, Woolworths Ltd has revealed three new directors, two of whom have considerable retailing success stories, though from different sides of the aisles.As well, Woolies also gets a high powered former banker, handy even for a company as large and cash rich as Woolworths, which is the country’s biggest supermarket chain.

Woolies yesterday announced that Christine Cross, David Mackay and Michael Ullmer had been appointed non-executive directors. The three take up their board positions immediately.

Ms Cross retired as an executive of UK supermarket chain Tesco in 2003 and now runs a retail advisory consultancy.

Currently, she is a non-executive Director of clothing retailer Next in the UK.

She becomes the only non-executive director on the board with retailing experience.

Mr Mackay retired as president, CEO and director of the Kellogg Company in December 2010 and previously held a position as managing director of Sara Lee Bakery in Australia.

He will bring the suppliers’ eye to the Woolies board, another skill that has been in short supply.

Mr Ullmer in August 2011 retired as deputy group chief executive at National Australia Bank.

He has been a director of NAB, Bank of New Zealand and Chairman of the subsidiaries Great Western Bank (US) and JBWere.

He is currently a director of Lend Lease.

Before the NAB he was a senior executive at the Commonwealth Bank.

“They bring a tremendous array of skills, knowledge and experience to the table and we look forward to their contribution,” Woolworths chairman James Strong said in yesterday’s statement.

Woolworths second quarter sales results today (11 am Sydney time) are not expected to set the world on fire.

Analysts expect the retailer to again report weak results for its Big W and Dick Smith chains. Dick Smith’s future remains up in the air with management and the board reviewing its future.

As well, slower sales growth is again expected from its core supermarkets business than rival Coles which reports on Thursday.

As well, analysts are looking for what management says on earnings guidance. But that will probably be held back until the interim results are released on March 1.Citigroup analysts say they expect the second quarter results will “place more pressure on the company to cut operating costs to meet 2012 financial year guidance”.

Woolworths reported its slowest earnings growth in a decade in the 2010-11 financial year.

To expand its sales and earnings growth the company has entered the hardware business with Lowes of the US (higher sales for the early opening outlets of the Masters chain will appear in today’s figures).

Woolies shares fell more than 1% or 32c to $24.50 yesterday.

 


And, as expected, the chief executive of toll road operator Transurban Chris Lynch will leave the company, stepping down early in the 2013 financial year.The decision had been widely expected since late last year and the company’s AGM which saw the protest vote from shareholders against the remuneration report drop sharply after payments to the CEO were changed.

Mr Lynch intends to resign as CEO and a director of the company with effect from July 2012, Transurban said on Monday.

“I look forward to playing my part in a smooth transition process over the next few months before moving on to the next stage in my professional journey,” Mr Lynch said in a statement.

Chairman Lindsay Maxsted said Transurban had a comprehensive succession plan in place for some time, resulting in a pool of internal CEO candidates.

“We also have a well-informed, well-researched view of the external market against which any internal candidates will be tested,” he said.

Transurban owns Melbourne’s CityLink and Sydney’s Hills M2 and Lane Cove Tunnel.

It also holds major stakes in Sydney’s M1 Eastern Distributor, Westlink M7 and M5, and the Pocahontas Parkway in Virginia in the US.

Transurban securities fell 1.6% to $5.49 yesterday.

This Information is provided to you by the Australasian Investment Review (AIR).Subscriptions are free.AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decision.

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