Stunned investors wiped A$700m (US$420 million) from the market value of leading Australian wine group Southcorp after it revealed a 97% slump in first half profit.
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Shares, which had been suspended from trading following a formal alert last week, immediately plunged 19% to a seven-year low.
The result was accompanied by the news that former chief executive Keith Lambert would receive a A$4.4 million (US$2.64 million) payout following his sacking. The payment was approved by the Southcorp board, which includes Bob Oatley as the company’s largest shareholder and Lambert’s father in law.
Lambert’s contract had 18 months to run when he was forced to resign last month. In addition he was paid A$1.23 million (US$858,00) not to work in competition with Southcorp for 12 months. Southcorp executive chairman, Brian Finn, asked if the payment was exorbitant said it depended on one’s view of exorbitant. “We had a contractual obligation in which we had no latitude.”
Lambert’s predecessor Tom Park who managed the company over the period of the Oatley family’s merger with its Rosemount company was paid A$10.1 million (US$6 million) on his departure.
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By GlobalDataSouthcorp formally reported a A$5.71m profit (US$3.43 million) based on a 53% fall in revenue to A$825m (US$495 million). This followed a succession of profit downgrades by one of the big four Australian producers.
