Errington also focused on the sudden departure of the head of the convenience retail operations, Richard Pearson. He is leaving after 18 months in the job in order to return to Melbourne and be with his family. Pearson is being replaced by Joanne Taylor, who has spent here career in human resources at a range of companies including The Star, McDonald’s Corporation and Westpac Banking Corp.
Segal says it would be a mistake to describe Taylor as purely a human resources executive. He says she was deeply involved in operations at McDonald’s and has overseen the Foodary expansion which included lifting staff numbers from 1000 to 5000.
Segal says the recent shift in responsibility for fuel sold through the convenience retail chain to fuels and infrastructure executive general manager Louise Warner made sense because of the integrated supply chain and the opportunity for convenience retail to focus on delivering exceptional customer service.
During an analysts’ briefing on Tuesday, Segal and Hepworth highlighted the fact that Caltex has returned about $1.6 billion in capital to Caltex shareholders over the past three years while maintaining return on capital employed of 20 per cent.
The company’s capital management has included an increase in the dividend payout ratio to 50 per cent to 70 per cent in the second half of 2018. The final dividend was unchanged at 61¢ a share.
The company announced an off-market buyback of $260 million shares that will boost earnings per share by 3 per cent.
Over the past three years, Caltex shares have underperformed the S&/ASX200 index by a significant margin. Total return from Caltex shares fell 10.6 per cent, compared with a 50 per cent gain for the index.
Over a longer period, Caltex shares have outperformed the market. Over 10 years since Segal has been CEO, the stock has had a total return of 332 per cent, whereas the market has only returned 212 per cent.
Caltex has had to deal with the lowest fuel refinery margins in history. The company will not give guidance on fuel refinery margins but it expects to have a competitive offer in the face of increased competition.
The 2018 result marks the last with Hepworth as CFO. He is retiring after a period that included a top-to-bottom restructuring of Caltex, including shutting its refinery at Kurnell south of Sydney.
Segal said Hepworth had been a trusted adviser who had helped ensure Caltex consistently delivered top quartile returns to shareholders.
TONY BOYD
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