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CEO retirement takes shine off Codan's golden run

Business

News of technology company Codan Limited’s continued golden run has been overshadowed by the imminent retirement of its trailblazing managing director and CEO Donald McGurk.

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The Mawson Lakes company produces hand-held metal detectors and designs and manufactures communications systems and yesterday announced a record net profit after tax of $90.2 million for the 2020-21 financial year.

The result follows a period of booming sales and acquisitions and surpasses its previous record profit of $64 million, which it posted 12 months ago and included full-year sales of $437 million, also a record.

However, the positive result was dampened with Codan CEO and managing director Donald McGurk announcing he was retiring after more than a decade at the helm.

McGurk has advised the board that it is his intention to retire from his role within the next 9-12 months but will remain as managing director until a successor is appointed to ensure a smooth transition.

The news of McGurk’s imminent departure caused Codan’s share price to fall by 8.2 per cent to close the day $1.46 down at $16.18.

McGurk joined Codan in 2000 and has been CEO and managing director since 2010.

Donald McGurk. Picture: codan.com.au

In the past five years, the company’s share price has grown from $1.17 in August 2016 to a high of $19.33 in June, three months after Codan joined the ASX200 in March as its market capitalisation soared past $3 billion.

Codan also yesterday announced a fully-franked final dividend of 16.5 cents to bring the full-year dividend to 27 cents per share.

“As a result of our strategy to strengthen and invest in our core business through releasing new products and broadening our geographic footprint, we were pleased to deliver another record year,” McGurk said in a statement to the ASX yesterday.

The company bolstered its tactical communications business during the year with the acquisition of US companies Domo Tactical Communications and Zetron for a combined total of more than $170 million.

It also sold its underperforming mining technology division Minetec to industry giant Caterpillar in June for about $18 million

Codan’s metal detection business contributed 75 per cent of the $437 million in sales while communications accounted for 22 per cent.

Africa was the biggest market ($203 million) followed by North America ($107 million), Europe ($54 million), Australia ($54 million), Asia ($11 million) and South America ($8 million).

During the year it also established a sales office in Mexico to focus on its gold mining and recreational markets, launched an e-commerce platform in Brazil and delivered its largest-ever order of Sentry HF radio units to an African military customer.

Headquartered in Adelaide, Codan has more than 700 staff globally and has offices in Denmark, Singapore, Mexico, Brazil, UK, UAE, and Ireland and manufacturing operations in South Australia, Canada, the United States and Malaysia.

Codan was ranked No.6 in InDaily’s 2020 South Australian Business Index of the state’s top 100 companies, up from No.12 in 2019.

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