Mr Donaldson resigned from the board after indicating he did not wish to renew his contract on its expiry at the end of 1996. Holliday has appointed Mark Robbins and Robert Rae, managers at two of its operating subsidiaries as joint chief executives, to replace him. They will report to chairman Michael Peagram in their new posts.
Mr Donaldson was recruited to the Huddersfield-based dyes and inks manufacturer from drugs giant Zeneca to take a hands-on management role and free Dr Peagram, who founded the company and combined the jobs of chairman and chief executive, to concentrate on strategy and acquisitions.
At first the partnership seemed to be paying off, but pressure on Mr Donaldson undoubtedly grew in January when Holliday issued a surprise profits warning which sent the shares crashing to a new low of 105p - well below the 195p investors paid when the company joined the stock market three years ago.
Holliday blamed a squeeze caused by the high costs of raw materials and pressure on selling prices for its own products. But yesterday Holliday struck a more upbeat note at the company's annual general meeting.
The company said the first three months of the year have shown "a substantial improvement" over the depressed trading performance in the second half of 1995.
"Although margins are not yet back to satisfactory levels, they are improving, and further benefits will accrue," Holliday said in a statement. It added that while the economy was still uncertain, the destocking that hit its 1995 sales had finished.
Analysts, who had cut forecasts for this year's profits from pounds 24m to pounds 14m following the recent warning, welcomed the news but expressed little surprise that trading was well above the levels seen in the second half of last year.
They added that the improvement reflected measures taken to reduce costs and new products from Holliday's pharmaceutical business in Spain.