David Rogers yesterday resigned as chief executive of Amstrad following a boardroom rift with Alan Sugar, the founder and chairman of the computers to cordless telephones group.
Coming less than two weeks after Mr Sugar was forced to rebuff "unfounded rumours" circulating about the company and a gloomy trading statement last month, the news revived worries in the City about the future direction of the company. The shares tumbled 28p to 191.5p yesterday.
Mr Rogers's resignation came after a disagreement with the rest of the board over a decision to reverse previous plans to rebuild the loss-making consumer electronics side. When he arrived at the group in August last year from Philips, his remit was to increase sales in the division, which has seen turnover halve in the past few years but no commensurate fall in costs.
Continuing tough trading in the business appears to have led to a re- think over the past few weeks, culminating in a decision just before Christmas to further reduce its size.
But the loss of the chief executive after just 15 months in the job confirmed the fears of many that Mr Sugar, who is also chairman of Tottenham Hotspur football club, is finding it difficult to satisfy City demands that he step back from the day-to-day management of the group.
The latest loss in the boardroom follows a string of resignations in the aftermath of Mr Sugar's failed attempt to take the company private in 1992. "Rogers' departure raises the question who is actually running the business," said one analyst. "It would be better if Sugar would turn all his attention to Tottenham."
Jeoff Samson, a non-executive director, said it was "just a question that policies proposed 18 months ago have now been reconsidered and it has been decided not to pursue them. Mr Rogers felt in the circumstances he couldn't carry on and we parted amicably."
On an annual salary of pounds 225,000 and with around 21 months of his contract still to run, Mr Rogers could be in line for a pay-off approaching pounds 400,000. He may also be entitled to a further unspecified bonus. However, 300,000 options which would net him a pounds 162,000 at the current share price, cannot be exercised until 1997. He is currently said to be holidaying in the Caribbean, and will depart formally on 12 January.
Amstrad Consumer Electronics sells the computers, faxes and satellite dishes on which the group's original success was founded. But in the face of flat consumer demand and intense competition, it has now become an Achilles heel, notching up losses of approaching pounds 20m for the past couple of years. Mr Rogers, who came from the giant Philips electronics group, unveiled a strategy last year of dividing all Amstrad's operations into several autonomous business units. ACE was to be split between a low margin- high volume division and one concentrating on new products and market opportunities.
Amstrad would give no details of the new plans to shrink the consumer electronics business. Mr Samson said the proposals could not be announced before they were finalised, and Amstrad's workforce of more than 1,100 would be the first to know.
Analysts were yesterday downgrading forecasts for the current year. One said he would be cutting his from a previous figure of pounds 22m to around pounds 12m, after roughly pounds 4m of exceptional costs for the restructuring and an additional pounds 6m of operating losses from ACE. In total, he is forecasting losses of pounds 10m from the division.
The downgrades come as recent sentiment has again started to run against Amstrad. The shares have fallen from a year's high of 293.50p in October, hit by the annual meeting statement in November and warnings from two big names, Nokia and Philips, that trading in consumer electronics remained difficult, while mobile telephone sales growth had also slipped.
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