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Evans Dixon's (ASX: ED1) new CEO has confirmed the struggling company has shed 100 of its staff since April and officially closed its Dixon Projects business in Australia.
Poor results from its US Masters Residential Property Fund (ASX: URF), pressures from the Royal Commission and weaker financial performance have led to ED1 shares losing half their value in the past 12 months.
EBITDA was down 26 per cent at $37.1 million in FY19 and the group expects financial performance to be in line with this level in FY20.
CEO Peter Anderson (pictured) took on the role in July to fill the shoes of Alan Dixon, who had shifted his focus to turning around the US fund's fortunes. But Dixon then took an extended leave of absence and recently stepped aside from his eponymous business altogether.
An operational review led by Anderson found a need for improved financial discipline at the company as well as better integration of its business divisions.In an announcement to shareholders today he claimed 'clearly articulated road maps' had been created to significantly improve financial performance.
"Each division has a specific, detailed operating plan for management to implement. Management incentives will be determined by progress against the plan, amongst other qualitative measures," he said.
"We have closed non-core operations, including Dixon Projects in Australia, scaled back operations in the US as the URF renovation pipeline runs off, ensured that there is no duplication of support services as well as refined our non-customer facing activities."
He noted URF's performance had been disappointing in recent years, but the company was very pleased with the progress its newly appointed joint CEOs Kevin McAvey and Brian Disler have made in improving operating performance for the fund in a short space of time.
"Whilst dissatisfied with the performance of URF and acknowledging the Responsible Entity's commitment to improve the financial outcome for URF shareholders it is important to note that the majority of our investment products have performed very well over the medium term, to the benefit of our customers," he said.
He said these scale-backs have allowed Evans Dixon to cut costs, including through staff cuts, with further cost savings on the horizon.
"These actions along with a number of other measures have allowed us to make significant expense reductions, which include reducing our headcount by 100 since April 2019 with minimal impact on customer facing operations," he said.
"We will continue to implement further cost saving measures where possible. This includes rationalising our office space and extracting other unrealised cost synergies.
"A key focus of the operational review is improving business integration and leveraging our strengths across the platform. We have already started to put in place forums and reporting structures to improve collaboration and the sharing of expertise and experience."
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