LONDON (Reuters) - The chief executive of Britain’s Premier Foods PLC (PFD.L) stepped down on Monday after 18 months trying to streamline the debt-laden maker of Hovis bread, sending its shares tumbling as investors wondered if the turnaround plan was faltering.
Michael Clarke sold businesses including Sarson’s vinegar and Branston pickle to bring down 1.3 billion pounds ($2 billion) of borrowing built up before the 2007 banking crisis, and initiated a shake-up at the company’s bread division.
He is replaced by Gavin Darby, who most recently was chief executive of Cable and Wireless Worldwide, Premier said on Monday.
Analysts said they were concerned Clarke’s departure could derail progress at Premier Foods, which has been trying to focus on core businesses to make its debts more manageable and boost revenue.
The company said in November it was cutting 900 jobs at the bread business, which accounts for nearly 40 percent of revenue. The division had lost a 75 million pounds contract, reported to be with the Co-Op.
“We see the surprise change of leadership as unhelpful to Premier’s stability and organic growth prospects,” said Martin Deboo at Investec. “With its financial restructuring complete, we think that consistency and longevity of leadership was going to be critical to its prosperity.”
Premier shares, which have risen 20 percent in the last 12 months as concerns over the company’s debts receded, were down 9 percent at 109.3 pence at 1112 GMT (0612 ET).
Clarke informed the board that he wanted to move on and may pursue other business opportunities, Premier said.
He steps down with immediate effect. Darby, who engineered the sale of Cable & Wireless Worldwide to Vodafone last year, will take over on February 4.
He spent a decade in the telecoms industry after working at Coca-Cola Company for 15 years. ($1 = 0.6327 British pounds)
Reporting by Paul Sandle; Editing by Sarah Young and Tom Pfeiffer