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Australia’s largest online book retailer Booktopia (ASX: BKG) has announced the shock resignation of its CEO Tony Nash, although he will still stick around in a different role.
The co-founder notified the board of his decision to step aside from the role of CEO following a poor set of third-quarter financial results, with EBITDA down 63 per cent from the previous year to $5.5 million.
He will continue as a full-time senior executive and director with Booktopia in a new role focused exclusively on growth.
Nash believes his decision is in the business's best interests and will allow the company to balance the demands of complex operations whilst remaining a high growth business.
“Building Booktopia from a budget of just $10 a day in 2004 into Australia’s leading online book retailer has been an incredibly rewarding journey,” said Nash, who will remain as CEO until a replacement is found.
“As an entrepreneur, my natural talent is making the invisible visible. I look forward to continuing to find ways to grow the business while handing over the duties that come with being the CEO of a larger and listed entity.
“It's time to hand over the leadership reins to someone who is more capable than me at that job description. I am genuinely looking forward to working with, and for, the new CEO.”
Booktopia Chairman Chris Beare said Nash’s decision to take on a new role in the business reflected his commitment to Booktopia and the desire to see the company reach its full potential.
“Tony has an unyielding commitment to Booktopia, its staff and customers, and he has demonstrated this over the last two decades,” Beare said.
“We look forward to his enthusiasm continuing to drive the company forward in his new position.”
Online book sales were one of the big success stories of lockdowns and pandemic-related restrictions; however, growth in online sales has returned to parity with the economy starting to return to normal.
Although the third quarter saw many COVID restrictions lifted, Booktopia faced a range of challenges with its distribution centre, with the higher cost base experienced in the first half continuing into the second half.
A drop in academic book sales dented revenue for the period. The business put this down to the reluctance of international students to return to study in Australia and the strong employment market that encourages school-leavers to postpone studying and take up employment opportunities.
The results displayed several positive signs, with the company expecting online book sales as a market segment to continue to grow in the high single digits per annum in the foreseeable future from this new post-pandemic baseline.
“All major and pureplay e-commerce retailers continue to invest heavily in their online offerings in anticipation that online sales will continue to grow over the next several years,” Nash said.
However, the board believes it needs to reassess its cost base to be flexible to cope with lower short term revenue growth rates. Alongside management, it is developing several initiatives which will be implemented during the fourth quarter to ensure business costs and investments are more aligned with the company’s current growth trajectory.
The announcement follows the Australian Competition and Consumer Commission (ACCC) launching proceedings against Booktopia in December 2021 over allegedly false or misleading claims made to customers over their refund rights for damaged and digital products.
Shares in Booktopia (ASX: BKG) have dropped by 20 per cent during this morning’s trading on the back of the announcement.
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