SAN
19/12/2013 14:00
ADDRESS
REL: 1400 HRS Sanford Limited
ADDRESS: SAN: Sanford Limited Annual Meeting - Chairman's Address
SANFORD LIMITED
SUSTAINABLE SEAFOOD
19 December 2013
Chairman of Directors Jeff Todd's Speech
Sanford Annual Meeting
19 December 2013
The Directors of Sanford are pleased to present to shareholders our report
for the year ended 30 September 2013. A full account of the Board's work is
provided in the Annual Report but I want to highlight briefly the Board's
main points of focus through this last year.
1. Board Activities
The Board has remained focussed through 2013 on the Company's strategic
direction, on providing strong corporate governance and on exercising
Board-level control over the Company's activities.
While the Company's full-year results for 2013 are disappointing given the
Board's higher expectations twelve months ago, a stronger market outlook and
improved operating projections provide the prospect of improved returns in
2014 and beyond.
Profit for the year of $20.4m was slightly ahead of last year's result of
$19.7m and was achieved once again in the continuing and challenging exchange
rate environment of the historically high New Zealand dollar. Returns from
fishing activity in the Pacific (tuna) and out of Tauranga (jack mackerel)
were well below expectations and growth of Greenshell mussels in the
Marlborough Sounds was slow. However, good results were obtained from most
other species including mussels from Stewart Island and the Coromandel.
Prices generally strengthened as the year progressed.
The Board has continued to focus on innovative programmes and projects across
the operating divisions aimed at securing improved returns for shareholders
on capital invested. On the revenue side, these initiatives cover a range of
projects around increased market returns and the establishment of a dedicated
development group which has been tasked with finding ways to extract full
value from our products and waste-streams across all our operations.
On the cost side of the business, the Company has continued to focus on
achieving catch and production outcomes at lower cost. Sanford has
maintained its investment in new technologies through the Primary Growth
Partnership projects with the Government.
The results of research into improved fish-catching technology through the
Precision Seafood Harvesting project were announced publicly last October to
world-wide acclaim. Commercial trials will now follow but the benefits of
the new catching techniques are clear in the higher quality of fish taken to
market and in the significant contribution to sustainability of the fishing
resource.
Mr Barratt will provide more information about the Company's operations in
his address which will follow.
2. Corporate Governance
Sanford expects the highest standards of corporate governance and ethical
conduct in all aspects of our business. We are proud of our record in the
sustainability of seafood for future generations.
During the year, the Board continued to develop its corporate governance
standards and this year has focussed particular attention on further
resourcing and enhancing Sanford's compliance programmes. Management has
worked with the Board to develop an improved strategy and reporting system
that will increase the confidence the Board has in our Company's compliance
systems in respect to Employment, Health and Safety, Food Safety and
Fisheries and Marine regulations. While we have gained increased confidence
over the year that our systems are robust, the ability of the Board to engage
more directly with executives and staff carrying responsibility in these
areas will ensure that the systems we have in place are properly maintained
and upgraded when required.
3. Retirement of Mr Eric Barratt
You will recall that at our last Annual Meeting in January 2013, I announced
Mr Eric Barratt's intention to retire from the position of Managing Director
at the end of 2013. The Board accepted his notice of retirement reluctantly
and with regret. During this current year the Board has been actively
engaged in the search for a new leader and in August we were delighted to
inform shareholders that our search had resulted in the appointment of Mr
Volker Kuntzsch as Chief Executive Officer to succeed Eric.
Mr Barratt joined Sanford through the acquisition of Feron Seafoods Limited
in 1982 and joined the Sanford Board in 1986. He was appointed Managing
Director of the Company on 1 January 1998 and has provided strong leadership
since then both within Sanford and throughout the industry in New Zealand and
globally. He is well-known, highly respected and knowledgeable right across
the industry and his contribution to the development of Sanford through his
years with the Company is significant.
He leaves an enduring legacy from a number of developments during his tenure
including the Auckland Fish Market, our fishery developments in scampi,
toothfish, Pacific tuna and, more recently, the innovative Precision Seafood
Harvesting technology. Mr Barratt also led the entry and subsequent
profitable exit from ventures in Canada and Argentina.
He will also be remembered for his commitment to the expansion and
development of Sanford's investment in the farming, processing and
international marketing of New Zealand's Greenshell mussels.
During his time at the top, Eric brought real depth to the Company's
sustainable development activity and reporting, supplementing the Company's
traditional Annual Report with the (sometimes) award-winning Sustainable
Development Report - always a very informative document and the substance
behind our 'sustainable seafood' tagline.
Mr Barratt has represented with passion and enthusiasm our Company and the
New Zealand industry at the highest levels of Government and internationally
among other global industry leaders.
The Board, management and staff express our gratitude to Eric for a job well
done and I invite shareholders and friends of the Company to join me in
wishing him every success and happiness in his future pursuits.
4. Directors' Fees
As you are aware, the Directors are bringing to shareholders today a proposal
to increase the directors' fees pool by $80,000. When the present Managing
Director retires at the end of the year (although he is not remunerated by
Directors' fees) the number of Board members will reduce to six.
The Board intends to revert to a membership of seven members again from early
in the New Year (2014) and therefore seeks additional headroom in the pool
from which directors' fees are paid to allow this recruitment process to be
undertaken.
Reflecting the disappointing result in this last financial year (2013),
current Board members will not receive any increase in the standard Board fee
for the year ended 30 September 2014 although small increases in Board
Committee and other fees will be paid where directors have been asked to take
on additional responsibilities.
The last increase in the directors' fees pool was in 2011 when the pool was
increased from $400,000 to $550,000. Fees paid to Directors totalled
$500,000 in 2012 and 2013.
5. Conclusion
Our Company is engaged in substantial and complex business activities and our
successes are achieved only with effective management and total commitment by
our team to the catching, farming, processing and marketing of our products.
While once again this year we have faced some difficult operating challenges
we are looking forward to the coming year with more confidence.
I acknowledge with deep gratitude the constant support and assistance of my
fellow Board members.
It is also appropriate once again to record the dedication and
professionalism displayed by all our fishermen and marine farmers, and
processing, administration, marketing and support staff along with the
executive team for their efforts and responses to the particular challenges
that we have faced over the last year. Sanford continues to be well served
at all levels of its operations by the excellent competencies of its people.
Sanford is fortunate in having such a dedicated and loyal complement of
staff, customers and suppliers to support the Company's operations.
End CA:00245445 For:SAN Type:ADDRESS Time:2013-12-19 14:00:04
