Chief forced out at Shanks & McEwan: Shares tumble on news of departure and profits warning Analysts fear for final dividend

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The Independent Online
SHANKS & MCEWAN, the troubled waste management group, faced another crisis of City confidence yesterday after the abrupt departure of the chief executive Roger Hewitt.

The news, in tandem with a further profits warning, sent shares in the company tumbling 15p to 97p. Analysts expressed fears for the final dividend, which was not fully covered by earnings last time and will be even more exposed this year.

Mr Hewitt was forced out by the non-executive directors, led by Gordon Waddell, the chairman, who was appointed a year ago. They have been under pressure from shareholders in the face of falling profits, a tumbling share price and large restructuring costs.

Shanks announced a restructuring in November after half-year profits slid pounds 6.6m to pounds 9.4m. Mr Waddell, who will act as chief executive until a successor to Mr Hewitt is found, said yesterday that the company was going to re-examine every aspect of its operations over the next four to six weeks. 'We're going to look at what problems there are in each area of the business and what potential there is.'

He added that Shanks' strategy would remain to progress as an integrated waste management group.

The company said the restructuring announced at the time of the interim results had been implemented but the benefits would not be seen this financial year. The company warned that trading conditions in the third quarter were still extremely difficult and that results were disappointing.

Shanks has had a turbulent history of profit warnings. Thorold Mackie, an analyst with Bell Lawrie White, was convicted of insider dealing last year after an early warning he received from Shanks' then chairman, Peter Runciman, in 1991. His case is awaiting an appeal.

Mr Hewitt was leaving as a result of a disagreement on future policy, according to the statement, but Sir Gordon declined to specify the exact nature of the dispute.

Sir Gordon would not give details of Mr Hewitt's likely compensation for loss of office, but he had a rolling contract and was paid pounds 136,000 last year.

Mr Hewitt is the second senior director to leave the company in the past four months. Andrew Fowler, finance director, was forced out in October. The company said at the time that he left for personal reasons, but Mr Hewitt later admitted that Mr Fowler's departure was connected to unhappiness over certain accounting policies and procedures.

A pounds 19m provision against losses at its construction division sent Shanks' profits in the year to last March crashing from pounds 27m to pounds 10.2m.

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