By Andrew Starke
Trading in Compass Hotel Group (CXH) shares has been suspended in a tumultuous week that saw the Western Australia pub owner shed its CEO, managing director, chairman and an independent director.
The embattled group, one of the largest freehold-owned and operated hotel and tavern portfolios in Western Australia, floated on the Australian Stock Exchange (ASX) in 2007 but has been forced to suspend trading pending the appointment of a new board.
In a number of notices to shareholders posted on ASX this morning (Jul 20), Compass announced the resignation of the company’s CEO and managing director, Bryan Northcote, chairman Rick Jones and independent director Peter Kadar.
All three resignations are effective immediately. Regan Cheriton, who was appointed CFO in March 3 2008, resigned from the company earlier this year.
“The Company has sought ASX guidance on the matter of the minimum requirement for directors for the Group and will, as a result, place the Company into voluntary suspension until the matter is resolved,” said a CXH statement.
The company is looking to appoint two new directors but did not return calls from TheShout to determine who these individuals may be and the time frame involved in their appointment.
However CXH claims that, despite its leadership crisis, "changes at Board level will not impact on the day-to-day trading performances of the hotels or disrupt staff".
Compass raised approximately $123 million through its initial float of 123 million shares in January 2008 and used the funds to acquire 14 premises — including 13 pubs — at the peak of the property market.
It announced an operating loss of $2 million for the six months ended December 28 as a result of double-digit decreases in revenue from its food and liquor operations.