The Costa Group Holdings Ltd (ASX: CGC) share price is on course to end the week in the red.
The horticulture company's shares are down over 3.5% to $3.18 in early trade.
Image source: Getty Images
Why is the Costa share price dropping lower?
Investors have been selling Costa's shares following the release of its annual general meeting presentation this morning.
After losing its chief financial officer earlier this month, today's update reveals that another senior executive is on the way out. This time around it is Chief Executive Officer Harry Debney that is leaving.
According to the update, after over 10 years leading the company, Mr Debney plans to retire from the role within the next nine months. As such, the company and chief executive are currently in discussions regarding an orderly retirement transition plan. This includes looking internally an externally for a successor.
What else did the company announce?
After acknowledging that 2019 was a difficult year, management appears pleased with its performance year to date. Especially given the headwinds it faced early in the year.
The company notes that the majority of its core produce categories are now experiencing positive demand and pricing from the retail sector. Furthermore, its farming operations are meeting yield and quality expectations.
However, while there are no adverse effects from COVID-19 on its production, it notes that mitigation costs are considerable.
These costs relate to an action plan the covers daily temperature testing, heightened hygiene protocols, and social distancing procedures. It has also had to deal with a fractured supply chain, from logistics through to ensuring it had an adequate labour force to meet its harvest needs.
As a result, the company has no plans to reinstate any form of guidance for FY 2020 at this time. Which means investors may have to wait patiently until its results in August to see how the company is truly performing.
