Originally Posted by
No Idea Either
So mindspeak, are you accusing Paul Scurrah of deceptive and misleading conduct??????
Scurrah has a track record of playing ducks and drakes with his announcements, that's for sure and certain. We had the saga of the 750 'rightsizing' program, announced with all due hoopla in August 2019. The rightsizing was, according to Virgin's ASX announcement,
... targeting a reduction of 750 corporate and head office roles, representing $75.0 million in cost saving by the end of FY20.
... This initiative will be cash flow positive to the Group for FY20.
On 7 November 2019, while talking up the turn around that he's got underway, Scurrah tells Elizabeth Knight of the Sydney Morning Herald that
By Christmas, most of the 750 in headcount reductions, designed to shave $75 million from Virgin's cost base, will be complete.
Christmas comes and goes, 750 jobs do not.
Come late February 2020, Scurrah is announcing the worst half year results since the GFC (all pre-coronavirus). In the ASX publicity release we're told that,
The Group’s workforce reduction program remains on track to remove 750 roles from the business and annualised savings of $75.0 million by the end of FY20.
On track, roger that. Curious then that as at 31 December 2019 employee costs are up by over $42 million (more than 6 percent).
On closer inspection, buried in the notes at the bottom of the second last page of the Interim Financial Report we read
In August 2019, the Group announced a workforce reduction program, targeting 750 roles. Of these, approximately 140 employees had left the business before 31 December, the cost of which was recognised in the group's interim result. Subsequent to 31 December 2019, the group has communicated a plan which affects a further 280 employees, who will leave the business by 30 June 2020 at an estimated cost of $10.6 million. Further plans are under consideration with regards to the remaining 330 roles.
So six months after the announced rightsizing less than 20 percent of the targeted number had actually left and more than 50 percent of the target hadn't even been identified and this program was 'on track'. You'd hate to see what a program that was off the rails looked like.
Given the numbers touted, Virgin were working on an average of $100K salary per employee being exited and around $38K per payout. For the initiative to be '
cash flow positive to the Group for FY20' they would have needed to have had the whole thing wrapped up by the end of February, early March 2020. So, so much for that commitment.
And just by the bye, that rightsizing program is touted in the VA Notes prospectus as a key element of '
Virgin's business focus'; that one program is the source of the single largest EBIT improvement for the Group. You might think that it might have been accorded some proper stewardship.