Clothier 'living on borrowed time' at Dalgety

Institutional investors in Dalgety yesterday warned that the company's chief executive, Richard Clothier, was living on borrowed time after it issued its second profits warning in two months.

Investors in the troubled pet food to fertilisers group took fright at the latest warning, driving the share price down by almost 15 per cent to 225.5p, which wiped more than pounds 113m off its stock market value.

Some institutional investors expressed anger at yesterday's trading statement. One, who declined to be named, said: "Just when we thought it could not get any worse it has. He [Clothier] is living on borrowed time."

Mr Clothier, however, ignored the threats and said he had no plans to resign: "I see eye-to-eye with the new chairman, Sir Denys Henderson, and the finance director. We have agreed about our approach and now we have got to get on and do it. I am determined to stay and deliver results."

Dalgety is considering selling one or more of its five divisions as part of an urgent strategic review . "I do not rule out selling one or two of our main businesses," said Mr Clothier.

Two of its divisions will undergo emergency surgery. According to industry sources, Dalgety has plans to make up to 700 people redundant at its ailing pet food business, about a fifth of its workforce. Jobs will also be lost at its fertiliser and animal feed business.

Analysts believe the price fall will leave the group vulnerable to a takeover bid by a predator which would break up the group. "Dalgety's credibility is at rock bottom. But things could get even worse," an industry analyst yesterday. "A rival may not be willing to buy such damaged goods. But companies such as Nestle or Heinz may be interested in businesses such as the pet food division."

Dalgety has warned that underlying profits will fall to around pounds 65m this year, compared with analysts' forecasts of pounds 80m-pounds 85m. A host of exceptional charges, totalling pounds 138m, will plunge the group into the red.

Dalgety's trading profits in the past three months have fallen well short of expectations. The chief offender is the pet food business, which produces the Felix and Winalot brands. Supply problems and price competition from Mars, its chief rival which sells Whiskas cat food, have resulted in poor sales. Dalgety has been forced to put aside pounds 67m to overhaul the business and fund redundancy costs.

Dalgety's decision to buy Quakers Oats' European pet food business in 1995 has drawn criticism from analysts. But Mr Clothier is adamant it was the correct decision. "It was right for us to buy the business and sell our consumer businesses such as crisps. But I admit our execution of the merger has been poor," he said yesterday.

Dalgety's agribusiness has also been hit by the wet weather in June, which reduced demand for fertilisers.

After inspecting the books Dalgety's new finance director, Ken Hanna, has decided to provide pounds 58m to cover a writedown in the value of some of Dalgety's assets and a clutch of businesses that are already up for sale.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence