Ritchie Bros. Auctioneers Inc., which has lost 38 percent of its market value in the past five years, needs a “rock-star” leader with a stronger marketing background, Chief Executive Officer Peter Blake said after the company announced his retirement.
Ritchie Bros., the world’s largest seller of used equipment to the construction, energy, mining and other industries, fell 5.4 percent to C$18.90 at 4 p.m. in Toronto, its lowest level since Sept. 20, 2012. Shares of the Burnaby, British Columbia-based company have dropped 38 percent from a C$30.34 high on Aug. 14, 2008.
“In my heart, there’s someone else out there who is a rock-star person who can fit in here and help guide the next advanced stage of growth I know is there,” Blake, 52, said in a phone interview from Vancouver. “I don’t anticipate any dramatic change in direction; it’s more about the execution. A leader that can align with that focus on customer service, sales and marketing.”
Blake will remain chief executive officer until the company’s next annual meeting in May 2014, and will assist the board in its search for a successor, the company said in a statement late yesterday. The company does not yet have a list of candidates, he said.
Analysts with Credit Suisse Group AG said Blake’s retirement was a surprise given his age. Hamzah Mazari, analyst with Credit Suisse, maintained a neutral rating, the equivalent to a hold, while dropping the target price to C$18.71 from C$20.75.
Ritchie Bros. stock has dropped in part due to struggles in the U.S. market as well as execution issues, Blake said.
“I’m not blind to the fact the stock hasn’t moved in the last five years, the board wasn’t blind to that either, so it felt like the right thing to do,” he said. “There are things we are doing that are very good, but a little later than we should’ve and that’s an execution issue. My bad for not being in front of that.”
This includes introducing more robust database software for its sales teams, he said.
Ritchie Bros. posted second-quarter adjusted earnings of 28 cents a share in August, ahead of analysts’ estimates for 27 cents, snapping five quarters of worse-than-forecast results, data compiled by Bloomberg show.
The board agreed that the company could use a fresh perspective, Blake said.
“I can handle myself in the boardroom, with sales and marketing, but it’s not my first skill-set,” said Blake, who is a chartered accountant and was the company’s chief financial officer before taking over as CEO in 2004. “Like everybody else, I’m really good at some stuff and I suck at other things. In fairness to the organization, we need someone who is really, really good at some of the things I’m not really good at.”
Blake said he hasn’t had any discussions for other jobs at this point and may take some time off to spend with his family. He also owns about 140,000 shares of Ritchie Bros. and is not planning to sell his holdings.