“Yes I am ok.”
This was how former HighCom (ASX:HCL) CEO Scott Basham ended his post on LinkedIn this afternoon, confirming word from HCL not too earlier he’d resigned – effective immediately.
Just yesterday, the company released guidance for its half-year report, stating Directors will take a pay cut for the time being. Uh oh.
“I’ll be taking a break with family and friends for a little while before reaching out to my network in due course to see what other exciting opportunities might be out there … to grow another great company with loads of potential too!” Mr Basham wrote.
Shareholders, clearly, aren’t feeling as positive.
HCL – an ASX-listed defence stock designing next-gen body armour for sale into global military and police markets (formerly XTEK) – has seen its share price sink 46.8 per cent to 17 cents heading into the last hour of trade.
One needn’t be a share market detective to figure out there are two different realities at play here: the one Mr Basham wants to promote, and that HCL wants to promote.
HighCom’s announcement regarding Basham’s exit included (as a headline key point) that HCL will now conduct a “company-wide review” and that “cost-cutting initiatives are underway”.
Poor financial performance clearly the issue
Reading between the lines, one can only assume that Mr Basham made way as a result of the company’s poor financial performance.
And there’s no shortage of data to back that up.
The company posted a net loss of up to $15 million in its guidance release yesterday, a pay cut for C-Suiters, and a wind-back of “costs” at its various operating sites.
That includes former Defence Minister Christopher Pyne.
Mr Basham made $700,000 in 2023; down from $800,000 the year prior.
Meanwhile, one-year returns are down 74.6 per cent; and the stock never returned to its all-time high of 91.3 cents hit in late 2019.
HCL’s share price has had a few runs at it since, but has generally tracked between the 60-cent and 30-cent mark, while taking in rather small orders the entire time, despite promising defence relationships (see: Christopher Pyne).
Forlorn tone
Mr Basham’s LinkedIn post was an interesting one.
Not only did he need to tell us “Yes I am ok,” but at one point, it sounded forlorn – “It’s been a tremendous privilege to lead and work with such a great group of people,” he wrote.
“I will miss them all, as I will miss our great partners, suppliers, customers and industry colleagues.”
Replacing Mr Basham, sort of, will be the new Executive Chairman, Mark Stevens.
But each division of HCL for now will be looked after by its respective and already-in-place division heads.
“The Board would like to acknowledge and thank Mr. Basham for his efforts in the change and transformation of the business since joining the Company in 2021,” HCL’s announcement read, signed off by now-Executive Chairman Mark Stevens.