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Australia's Futuris Loses CEO After Profit Warning

Australian rural conglomerate Futuris said on Thursday chief executive Les Wozniczka had resigned, a day after the company slashed its fiscal 2008 profit forecast, helping its shares recover the previous day's heavy losses.

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CNBC.com
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Wozniczka will stay on in the role until Futuris finds a successor following an international search.

"In the eyes of the market our company has not made satisfactory progress on building the core businesses and reducing debt through the realization of the substantial capital tied up in non-core and underperforming businesses and assets," Chairman Stephen said in a statement.

Futuris shares rallied as much as 33.5 percent to A$1.29 in early trade in a firm overall market. They had tumbled 27 percent on Wednesday following a profit downgrade which it blamed on weaker sales at its plantation investment funds and higher interest expenses.

"It doesn't come as a surprise ... the market obviously viewed the announcement positively," said Belinda Moore, an analyst with ABN AMRO Morgans.

Moore said Wozniczka's resignation was one step in the process of turning the business around. "But there is still a long way to go," she added.

Gerlach said he expected significant interest in the role given a positive outlook for the sector and the opportunities that exists within Futuris' core businesses.

Futuris is planning to sell its non-core businesses to pay down debts. Earlier this year, it was forced to dump plans to sell its 43 percent stake in AAACo, the world's biggest cattle firm, due to turbulent market conditions.

"We are in a volatile market, so values you could have achieved last year won't be achieved this year," Moore added.

Despite Thursday's rebound, Futuris shares are down about 42 percent in 2008, compared with a 16 percent fall in the benchmark S&P/ASX 200 Index.