NATIONAL: Australian wholesaler Austin Group has wasted no time in announcing a series of write-downs, licensing reviews and redundancies in the wake of its far-reaching company restructure.
At the group's recent annual general meeting, managing director Brendan Santamaria revealed the company would "substantially" change its business operations within coming months with a new shareholding arrangement, a new board and a strengthening of the senior management team. Santamaria said the company had also closed its Perth, Brisbane and Auckland offices and consolidated their functions into its head office in Geelong.
Today Santamaria revealed the cost of the consolidation with a "number" redundancies expected to have an unbudgeted negative impact on the current financial year of $400 000. However, Santamaria said it would deliver an annual saving of $2 million together with an improved efficiency in administrative and sales functions.
"In addition, we have closely examined the carrying value of all assets and intangibles in the business and taken the decision to write down by $700,000 intangibles associated with dormant brands."
As part of this process, Santamaria said Austin Group had conducted a review of all licensed brands and decided to "exit" those which did not suit the company's new direction. While Santamaria did not reveal the affected brands, he said the decision would result in an unbudgeted one-off exit payment of $260,000 to the brand principles.
"In order to ensure that we have a cost base that is more accurately aligned to the current business, an examination of the current level of working capital has lead to a decision to write down the value of stock by an additional $500 000."
Santamaria said although this would impact on the company's current full year result, it would result in a rapid return to sustainable profitability and deliver shareholder growth.