SCY Chart

[CD_CHCH]

Smiths City names 'turnaround specialist' Roy Campbell as CEO - April 2015

https://www.nbr.co.nz/article/smiths...-ceo-bd-171399



Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

I was recruited to give this NZX listed, troubled national retailer a last bid at profitability. Over my 5 year tenure I comprehensively restructured the business. I Introduced a customer centric focus, shed costs, united the retail team, recruited rising stars from within the NZ retail market and implemented significant innovation strategies to maximise the ROI for as long as possible. The first three years saw a significant shift in brand awareness, purchasing capability, balance sheet improvement and positive culture shift. SCG grew its store numbers, rebranded its major stores, implemented a smarter purchasing scheme and focussed on the NZ consumer. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell




I was recruited to give this NZX listed, troubled national retailer a last bid at profitability.

14-Apr-15 The Board of Smiths City Group announced late last year that our Managing Director for the last 15 years – Rick Hellings – was stepping down and as a result a search process had commenced. We are pleased to announce the appointment of Roy Campbell as Chief Executive Officer. Roy will start on 1st May 2015. In welcoming Roy we also wish to acknowledge the successful leadership of Smiths City through many periods of disruption and intense competition by Rick Hellings, our outgoing Managing Director. Rick has been with us for 30 years, half that time as Managing Director.

Audited full year financial results to 30 April 2015 - Profit before tax of $9.3 million up from $4.7 million in the prior year. NTA per share 90.16 cents. 3.5 cents per share Gross Dividend paid. Share price 56 cents (Yahoo Finance) - Looks pretty profitable to me before Roy started

30-Oct-2015 Sale of Colombo St property for $20 million

19-Jan-2016 Smiths City (Southern) Limited (Southern) has entered into a conditional agreement (Conditional Agreement) to purchase the business and assets of both Panmure Furniture City 1983 Limited (Furniture City) and its logistics operation Lucky Dragon Limited (Lucky Dragon). Auckland based, Furniture City, has stores in Auckland and Whangarei. Purchase price - $5.85m plus GST (if any)

1-Apr-2016 Purchase of Panmure Furniture City and Lucky Dragon Ltd settles

The first three years saw ~ balance sheet improvement

17-Apr-2018 Smiths City trading update - Trading losses for the year are expected to range between $1.25 million and $1.75 million compared to a trading profit of $2.0 million last year. In addition to the trading loss, Smiths City expects to make an impairment provision of $4.8 million relating to the leases on stores that have consistently underperformed due to factors including: changing trading patterns, a shift in local conditions due to the opening of new retail hubs, and onerous leases. The net loss before tax is forecasted to range between $7.0 million and $8.0 million compared to a profit of $2.4 million in the same period last year. “Meanwhile, the disruptions to trading caused by the refurbishment and rebranding of the former Furniture City stores in Auckland and Whangarei and the closure of the Ngauranga Gorge store in Wellington in November have weighed heavily on the results. “The rebranded Auckland stores, which reopened at the start of December, are not yet delivering to our expectations. Although we are making strong sales of appliances – a category previously not available in the former Furniture City stores – furniture sales are yet to recover to levels prior to the rebrand.

Audited full year financial results to 30 April 2018 - Net loss before tax of $9.9 million down from a net profit of $2.0 million in the prior year. NTA down to 80 cents. Dividend cancelled. Share price 45 cents (Yahoo Finance) - 3 year change from $9.3 million profit to $9.9 million loss ($19.2 million variance) NTA reduced by 11.3%. Share price down 19.6%. Dividend down 100%.

The close of my tenure was due to the selling of the business.

May 2020 Smiths City enters receivership following the sale which involves the acquisition of all of Smiths City Finance and the great majority of Smiths City’s stores. Directors believe Smiths City’s ordinary shares will retain no value.

2 out the 3 Panmure Furniture Stores purchased in 2016 to be closed (Mount Wellington & Whangarei) The other Panmure Furniture Store in Wairau Park was closed Nov 2019. So a few years after paying $5.85 millon plus GST (if any) for the chain all the stores have been shut. Perhaps selling their major asset - the Colombo St site - was a really stupid idea.

Assuming the CEO to be the highest paid staff member and taking the lower of the salary band figures published in the 30-Apr-2016 to 30-Apr-2019 annual reports show that presumably Roy was paid at least $2.25 million during those 4 years excluding whatever he has been paid to 30-Apr-2020.

2016 $ 480,000
2017 $ 670,000
2018 $ 580,000
2019 $ 520,000
2020 $ ???
Total $ 2,250,000

Well the business was certainly 'turned around' - perhaps not quite in the direction the shareholders would have preferred. Question is did shareholders get value for money for the remuneration paid to the 'turnaround specialist' ?

‬