In morning trade the BWX Ltd (ASX: BWX) share price has crashed lower following the release of a leadership and trading update.
At the time of writing the personal care products company's shares are down 23% to $1.55, but were down as much as 32% to $1.35 at one stage.
What was announced?
This morning BWX announced that its current non-executive director, David Fenlon, has been appointed the company's global CEO and managing director effective July 1.
The release explains that Mr Fenlon is both an experienced consumer products and retail CEO and an experienced listed company director.
In addition to this change, the company announced a global restructure anchored on building business capability and executional focus in key markets. It believes this will help scale the business for growth and take advantage of the momentum in the natural category.
BWX Chairman, Ian Campbell, said: "The Board acknowledges the significant effort that is required to build capability within the business and implement the systems and processes that are required to support a business of BWX's size."
Before adding: "The leadership changes announced today are intended to increase capability and focus. The Board is keen to see the BWX strategy and the company's key transformation initiatives implemented with greater urgency to ensure the business can continue to scale from a stable base."
Trading update.
BWX advised that it continues to see growth in consumption and category outperformance in Sukin Skin and Hair. For example, its ranging in Coles Group Ltd (ASX: COL) has delivered high double-digit growth.
The brand was also rolled out successfully into Woolworths Group Ltd (ASX: WOW) subsidiary Big W in February and will launch in Target stores in July.
However, because of the expected underperformance of the Sukin brand in the fourth quarter due to it cycling unprofitable promotions and unnecessary stock building, the company has downgraded its EBITDA guidance once again.
When the company released its half year results in February, it downgraded its underlying EBITDA guidance from between $27 million and $32 million to between $27 million and $29 million. BWX now expects "trading" EBITDA of between $21 million and $23 million in FY 2019.
Looking ahead, management expects to see improved margins and a reduction in trade investment in FY 2020 as promotional activity and stock is managed to appropriate levels.
