Simonds Homes CEO steps down with immediate effect, founder's grandson steps back into role

Simonds Group (ASX: SIO) CEO David McKeown has stepped down with immediate effect after just 17 months in the role and will be replaced by executive chair and former CEO Rhett Simonds.

The leadership shake-up comes just six weeks after the homebuilder completed its $10 million purchase of Dennis Family Homes (DFH), following a December half of $1.5 million earnings growth despite what McKeown referred to as a "challenging macroeconomic environment".

McKeown was promoted into the leadership position in November 2023 after serving Simonds Group as its chief financial officer (CFO) since the start of that year, before which he had been CFO of the Simonds Family Office for more than two years. 

Rhett Simonds had previously been acting as both executive chair and CEO since 2021, and was sharing the CEO position with another executive Kelvin Ryan for a short period before that.

McKeown had worked with him on the turnaround of the business, and in late 2023 it was resolved that Rhett - the grandson of the group's founder Gary Simonds - would vacate the CEO role so that he could focus on key strategic issues including housing undersupply and key partnerships. 

In today's announcement the company highlighted Rhett Simonds' involvement with the company since 2005, describing him as leading the development of the company's long-term strategic plan including the recent acquisition of Dennis Family Homes.

The board thanked McKeown for the "important role he played during his time with Simonds", wishing him the best in his future endeavours.

"As one of Australia’s oldest home builders, we have seen the ups and downs of the market for more than 75 years," says the incoming CEO, who will earn a base salary of $950,000 across the two positions plus incentives.

"We made some difficult decisions immediately in the wake of the Covid-19 pandemic. That short-term pain has now put us in a strong position to grow, where some of our peers sadly did not survive.

"The financial turnaround for us has been strong, as demonstrated by the latest half year results. We will now bed down the important acquisition of Dennis Family Homes and the opportunities that provides our business."

Today's announcement also coincides with the resignation of David Denny, who the group described as having "provided valuable contribution" to the company in his time as director since November 2021.

Simonds Group also announced three changes to its leadership, including the appointment of the founder's son Mark Simonds as executive director, Andrew Bloore as deputy chair of the board, and Piers O’Brien as chair of the nomination and remuneration committee.

Whilst most Australian stocks are following Wall Street's lead in decline today, with the All Ords down 2 per cent at the time of writing, Simonds Group shares have fallen 17 per cent to $0.145 following the leadership announcement.