Speaking after yesterday`s release of a profit warning, AST Group CEO John Miller said recent developments leading to the resignation of previous CEO Jan van Zyl and subsequent changes to the board were driven by non-executive directors and shareholder Kumba.
"Was there shareholder activism? No," he told an analyst and media briefing.
"Considering AST`s market update in October, the question, I am sure, is why we are announcing a profit warning only today. AST warned then about tough market conditions and actions to reduce the impact.
"It is now clear that AST was not conservative enough about its ability to effect the required change in time. Even though market conditions deteriorated, it was difficult to do a 90-degree turn in time. We reacted too slowly."
Non-executive chairman Gerrie de Klerk, who relinquished his executive role as part of the changes, says the group was too aggressive about growth.
"While the focus was on aggressive expansion, the balance sheet was not being adequately analysed and managed, and as a result it weakened and could not effectively fund this growth. It is against this background that the board acted on 5 December."
Miller says the new board has a more conservative approach with a renewed focus on core strengths. Core businesses have been identified as infrastructure services and IT solutions.
Although the group has identified what non-core businesses it intends to shed, directors say they will name them only at a later date.
About 350 jobs are being shed, although Miller says some of the headcount reduction is expected to be in the form of attrition.
Miller says the focus now will be on "quality of revenue" rather than quantity, and the company will be more selective about what business it undertakes.
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