Ellerines locks management into contracts
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By Nick Wilson
Furniture and appliance retailer Ellerine Holdings has locked key members of its management team into three-year contracts, saying it is important they stay on board to ensure the proposed R1,45bn merger with rival Relyant is successful.
In his chairman`s statement in the group`s recently released 2004 annual report, Denzil McGlashan said the proposed Relyant acquisition continued to take up a lot of management time and `for the acquisition to be successfully implemented` it was `vitally important` that key members of the team be on board for the next three years or so.
`As a consequence, your board deemed it prudent to lock in certain members of the management team by signing three-year contracts with them.` McGlashan said these agreements would only be activated if the merger was approved by authorities and was implemented.
The executives involved include CEO Peter Squires, financial director Reg Rawlings, marketing and merchandise director Arnold van den Borne , credit retail operations director Mark Carter and credit control director Danie Colyn.
Jeff Dritz, the group executive director, has also committed himself to the company, but for a shorter period and with fewer benefits and obligations.
In the CEO`s review, included in the annual report, Squires said the buoyant retail trading conditions were expected to continue well into the 2005 financial year.
However, he said the retail durable market remained a competitive environment and the selling prices of goods sold by the group, particularly in its credit chains, were not expected to show a significant increase . Squires said Ellerines anticipated that the contribution from its Wetherlys division would increase significantly during the year ahead due to organic growth as well as the expected additional volumes from the new outlets that would come on stream.
He said trading results for the first two months of the new financial year were encouraging and the trend of improved collections and fewer delinquent accounts in the credit chains was continuing.
`With all divisions well placed to take advantage of the favourable trading environment and with both inventories and operating costs well under control, the results for the year ahead should show a meaningful increase,` said Squires.
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