Today's SMH
Investors back return of A2’s former chief

SHAKE-UP

Darren Gray

A2 Milk’s decision to install former chief executive Geoffrey Babidge as interim CEO after the sudden departure of Jayne Hrdlicka has been applauded by investors amid hopes disruption from the shock management change will be minimal.

Andrew Mitchell from longterm investor Ophir Asset Management said while leadership changes created a degree of uncertainty around strategy, Mr Babidge’s appointment, along with clarity from a2 around the balancing of growth and margins delivered confidence.

‘‘Ideally we would like Geoff [Babidge] to continue in the role for many years given his history with building the business. A2 is a very unique business that is difficult to recruit for,’’ Mr Mitchell said.

‘‘However, it is in a fortunate position of being highly profitable and fast-growing and will be able to attract top executives from within the global fast-moving consumer goods market,’’ he said.

A2 Milk stunned the market on Monday when it announced Ms Hrdlicka, who had been CEO for just under 18 months, had stepped down.

In a statement a2 cited Ms Hrdlicka’s rising travel demands as the reason for her departure.

Later she said there had been ‘‘unforeseen changes in my personal circumstances in the very recent past and they must take priority’’.

It is also believed that a2’s board was concerned about the pace of Ms Hrdlicka’s push to increase investment in marketing to boost a2’s growth in China and the US, given the effect it would have on earnings margins.

The company has said it would consider internal and external candidates for the role.