No regrets, says Wellard boss

Wellard chief executive and major shareholder Mauro Balzarini says he has no regrets about floating the company, despite doubts emerging about its future as a going concern.

Mr Balzarini said he felt for investors who had lost money but maintained he was the best person to lead the company.

The Fremantle-based live exporter released unaudited financial results in time for yesterday’s reporting deadline.

It announced that non-executive director Sharon Warburton and company secretary Yasmin Broughton had resigned, but gave no explanation as to why.

Wellard shares fell to an all-time low of 27.2¢ before recovering to close at 28.5¢, down 13.64 per cent for the day, after coming out of a 48-hour trading halt.

Mr Balzarini said he was “obviously sorry” for people who had lost money trading in Wellard shares. The shares were worth $1.39 on listing in December after an initial public offering raised $298.9 million.

“I don’t have regrets (about the listing),” he said. “I still believe it was the right thing for Wellard. Nobody is happy if a company creates a loss for the shareholders. Having said that we do not regret the model, we do not regret what we have written in the prospectus.”

Mr Balzarini said the prospectus stated that Wellard operated in a volatile market and that there were risks in investing.

Wellard’s net profit after tax came in at $14.8 million, which was in the range expected after three downgrades. However, it was less than a third of the $46.4 million tipped in the prospectus.

The preliminary full-year results show Wellard had breached an undertaking in its working capital capacity at June 30 but obtained a waiver and extension. It has until October 14 to remedy the breach or it becomes a default.

Borrowings of $158.9 million have been re-classified from non-current to current liabilities resulting in a working capital deficiency of $110.3 million.

Wellard is likely to breach other covenants in working capital and secured loan facilities.

The remaining directors believe it is appropriate to refer to the company as a “going concern” because there is an expectation the existing breach can be remedied and that lenders will waive anticipated breaches. There is also an expectation Wellard will receive $15.8 million it is owed by Mr Balzarini’s private company WGH Holdings.

“Should Wellard or the Group be unable to achieve the matters set out above, a material uncertainty would exist that may cast significant doubt as to whether Wellard will be able to continue as a going concern,” the preliminary report states.

Asked if WGH Holdings would repay the $15.8 million loan by September 30 as scheduled, Mr Balzarini said: “I think so.”

WGH is refinancing to repay the loan. It also expects to reap more than $100 million from the sale of its farms in WA.