Caltex tightens belt as executives head for exit
Caltex boss Julian Segal has suffered a string of retail executive departures as he prepares for potential head office cuts as part of a focus on costs in the wake of last week’s profit downgrade, his third for the year.
In a letter to staff two weeks ago, Mr Segal said Caltex was on a “continuous improvement program” and “it could not sustain the present cost structures”. This is being interpreted as notice of staff cuts at the troubled fuel company.
Last week he told the market fuel and convenience earnings this year would fall by 50 per cent from $161 million to $80m and on Friday the stock price fell 12 per cent to five-year lows of $23.68.
Falling fuel prices have not helped and Caltex’s retail fuel margins are said to be at about 3.3c a litre, or just half what they were a year ago. Earlier this year Mr Segal appointed former HR boss Joanne Taylor as head of convenience after ex-Coles executive Richard Pearson left the business.
Ms Taylor came three years ago from McDonald’s Australia.
In the last few weeks the division has also seen the departure of chief financial officer of retail, Miles Drury, and merchandise chief Alexander Esparza, who has returned to Europe. Former Foodary senior executive Helen Moore has gone on maternity leave but will not be returning.
Ms Taylor is understood to be recruiting former McDonald’s executives to fill the gap and company insiders say the changes are just the normal fallout from a change at the top. A company spokesman said all the executives left for different reasons.
The moves come as Caltex is retaking control of its network with some 800 stores now directly under company control. There are about 180 former franchisees working out their time with the company which means they will be gone over the next 12 months.
This means Caltex will lose the local knowledge of the franchisees at a time when former executive Mike McMenamin has signed as Australian head of the EG Group.
The company last week blamed the downturn on a “challenging market” but others say there are structural changes in the industry with Viva cutting retail prices to regain share and Coles and Woolworths making changes to their convenience offering.
Extracted from The Australian