Adbri Limited (ASX:ABC) shares fell as much as 20% by midday, after the Australian cement and lime producer announced an abrupt exit of its CEO Nick Miller.
The cement company has tapped Mark Irwin as interim CEO. According to the Adbri board chairman Raymond Barro, Irwin brings extensive experience to the company. Barro explained that Irwin has held senior executive roles at major Australian companies such as BHP Group (ASX:BHP), Graincorp (ASX:GNC), and OZ Minerals (ASX:OZL).
Irwin’s immediate priority at Adbri will be to try to improve profit margins. Among other things, the executive is expected to focus on cost reduction. Additionally, he will try to achieve operational efficiencies.
As it struggles with soaring costs, Adbri is considering repricing customer and supplier contracts. Additionally, the company is considering accelerating the sale of its surplus land to unlock additional capital. Adbri said it plans to begin the search for a substantive CEO soon.
Apart from the executive change, Adbri also revealed that inflation and wet weather conditions have continued to weigh on its profit margins.
Adbri insiders are buying the dip
Adbri shares have declined more than 20% in the past three months and dropped 40% over the past year. Insiders, such as directors and executives, have taken advantage of the pullback to buy shares in the cement company at the reduced price.
TipRanks’ Insider Trading Activity shows that Insider Confidence Signal is currently Positive on Adbri. Corporate insiders have purchased AU$65,600 worth of Adbri shares in the past three months.
Adbri share price forecast
According to TipRanks’ analyst rating consensus, Adbri stock is a Hold based on two Buys and seven Holds. The average Adbri share price forecast of AU$2.57 implies over 70% upside potential.
Closing remarks
Adbri has brought in an executive which it believes is better suited to solve the challenging issues. Moreover, the company seems to still have several levers to pull in attempting to overcome its obstacles.
