The Costa Group Holdings Ltd (ASX: CGC) share price is down around 1.7% after investors learned of a retirement within the business.
Costa is Australia’s largest horticultural business. It produces glasshouse tomatoes, berries, avocados, mushrooms and citrus fruit. It has over 4,500 planted hectares of farmland, 30 hectares of glasshouse facilities and seven mushroom growing facilities across Australia. Costa also has international interests, with majority owned joint ventures covering six blueberry farms in Morocco and three berry farms in China.
Costa’s Retirement
Frank Costa has decided to retire from the Costa Board, effective 4 July 2019.
Costa Group said that Mr Costa has spent a lifetime’s work building Costa into a successful company that is highly respected as a major force in Australia’s fresh produce industry.
Mr Frank Costa said: “I have been delighted with the growth and quality of the business as it has become the country’s leading horticultural group which continues to set net standards in technology and sustainability across its portfolio.
“Now is the right time for me to step back from a formal engagement whilst retaining an active involvement in the company’s future progress as an advisor to the Board.”
It is a shame when a leading person or founder of a business steps aside. But this doesn’t mean it’s a bad thing – just look at how well Microsoft is doing despite Bill Gates playing no active part in the management of the company.
Costa is currently going through a troubled time with issues within some of its produce segments and profit likely to be less in FY19 than previously expected by management and investors alike.
It could be an opportunistic time to buy Costa shares with the share price depressed, but the company will need to deliver some profit growth over the next 12 months or investors could send the share price down further.
If you don’t like the idea of holding a volatile business, then the reliable and proven ASX shares in the free report below could be better picks.
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Disclosure: Jaz owns Costa Group Holdings shares at the time of writing, but this could change at any time.
