SHARES in the company behind Hovis bread and Mr Kipling cakes tumbled yesterday after its chief executive quit after just 18 months at the helm.
Premier Foods said Michael Clarke, who joined from Kraft Foods in September 2011, had indicated to the board over Christmas he was considering moving on “to pursue other business opportunities”.
Premier said Clarke will remain on hand until mid-2013 to help with the handover to his successor, Gavin Darby, the former chief executive of Cable & Wireless who will take over the reins in early February.
Shares in Premier fell 12 per cent on the news and left analysts concerned over the firm’s future.
Clarke, who has overseen a massive cost-cutting and restructuring programme since joining the debt-laden group, was widely expected to stay on to ensure the group’s stability after the turmoil of the past year.
Martin Deboo, analyst at Investec said: “With its financial restructuring complete, we think that consistency and longevity of leadership was going to be critical to its prosperity. We now anticipate a further period of uncertainty.”
Clarke is thought to have collected around £2.7m in pay and bonuses during his time at company.
Premier has been selling off assets such as Branston’s range of pickles and Robertson’s jam to pay down debts of more than £1bn. It is concentrating instead on eight key brands including Ambrosia, Hovis and Bisto.
The food group secured a £1.4bn debt refinancing with its banks last year in exchange for making major disposals. In November it also cut 900 jobs at its bread unit as part of the restructuring.
PROFILE: GAVIN DARBY
GAVIN DARBY is making a return to the consumer goods sector after a decade in the telecoms industry that ended abruptly last year. Darby, who was hired in November to 2011 as chief executive of Cable & Wireless Worldwide, engineered its £1bn takeover by telecoms giant Vodafone last summer.
But his stay at CWW came to an end following the merger after Vodafone decided to replace him with the head of its enterprise unit Nick Jeffery. It was not the first time Darby had been ousted from Vodafone. He first joined the FTSE firm in 2001 and became chief executive of its UK operations before taking charge of growing Vodafone’s international business in the US, Africa, India and China. Despite gaining a good reputation and rising through the ranks he left in 2010, reportedly due to differences with Vodafone chief executive Vittorio Colao. Before moving into telecoms, Darby spent 15 years working for the soft drinks giant Coca-Cola, where he ended up as regional president with responsibility for 30 European countries.
Darby yesterday pledged to invest “a significant personal sum” in Premier’s shares, with the company matching the size of his investment. The move should reassure investors looking someone committed to the long-haul at Premier Foods. Darby added: “I am very excited to be taking on this role. Although markets remain difficult, I look forward to working with the team to develop and grow the company’s power brands in the coming years,” he said.